Financial Times FT.com

Insight: Understanding liquidity is key

By David Clark

Published: May 27 2008 16:16 | Last updated: May 27 2008 16:16

The current financial crisis has revolved around the drying up of markets that had been built on the presumption of ample liquidity.

Massive leveraged positions were built up in instruments which, in spite of their triple A credit ratings, suffered from significant systemic liquidity risk and were difficult to value in the best of times.

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