Tag Archives: Liquidity

In the FT, Martin Wolf discusses Mervyn King’s proposal to make the central bank a “pawnbroker for all seasons” as laid out in King’s recent book “The End of Alchemy.” Lord King offers a novel alternative. Central banks would still act as lenders of last resort. But they would no longer be forced to lend against virtually any asset, since that very possibility must create moral hazard. Instead, they would agree the terms on which they would lend against assets in a crisis, including...

Each week we will publish the best articles by Marc Meyer, one of the most critical voices against the SNB.This post explains 3 points: That the SNB does not understand what assets and liabilities are – and due to this misunderstanding – it speculates with massive leverage. The difference between good and bad deflation, and that Switzerland has good deflation. That both the SNB and the Swiss government do what some Swiss exporters want. Therefore, the formerly admired central bank...

Just as a fierce storm can change the shape of a shoreline, liquidity has drained away from the post-crisis financial markets, creating new and unfamiliar sandbars where investors can wind up shipwrecked if they’re not careful. To navigate the newly parched market, Credit Suisse’s Private Banking and Wealth Management division says that investors must not only pay much closer attention to liquidity risks in their portfolios, but also learn to use illiquidity to their advantage.   The...