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With no measure, is liquidity half-full or half-empty?

By Tony Jackson

Published: May 10 2009 17:23 | Last updated: May 10 2009 17:23

One of the more intractable problems to have emerged from the financial crisis is that of liquidity. In normal times, we assume an asset can be sold at its market price. Take that away, and the effects are literally incalculable.

How regulators and practitioners address that is plainly crucial. The trouble is that liquidity is hard to define and can be impossible to measure. There is even disagreement over how far it is a good thing.

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