Liquidity Risk in Periods of Intensive Information Flow
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Beschreibung
Liquidity is a prerequisite for the sound functioning of markets
and of the whole financial system. However, once unexpected
and unsettling information is released, liquidity may be insufficient
to meet the demand of institutional and private investors.
In the worst case, problems affecting one market may spread
and result in a systemic crisis or a bank run. Consequently, it is
particularly important to implement risk management solutions
at the institutional level that help to avoid the risk of such liquidity
breakdowns.
This book analyzes issues regarding the formation of liquidity
shortages from two points of view. Firstly, it focuses on the process
of liquidity provision in financial markets observed during
scheduled public releases of important and surprising information.
Secondly, it investigates risk management solutions applied
by policy makers in order to avoid dangerous scenarios
of systemic liquidity crises affecting the whole financial system.
Autor*in
Magdalena Malinowska