Market liquidity and financial stability

A. Crockett

Financial Stability Review, 2008, issue 11, 13-17

Abstract: Stability in financial institutions and in financial markets are closely intertwined. Banks and other financial institutions need liquid markets through which to conduct risk management. And markets need the back-up liquidity lines provided by financial institutions. Market liquidity depends not only on objective, exogenous factors, but also on endogenous market dynamics. Central banks responsible for systemic stability need to consider how far their traditional responsibility for the health of the banking system needs to be adapted to promote stability in the relevant financial markets.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:fisrev:2008:11:3

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