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Investments glossary

Liquidity Crisis


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Quotes of the day:

To keep a lamp burning we have to keep putting oil in it.

— Mother Teresa

A liquidity crisis is a financial situation characterized by a lack of cash or easily-convertible-to-cash assets on hand across many businesses or financial institutions simultaneously. In a liquidity crisis, liquidity problems at individual institutions lead to an acute increase in demand and decrease in supply of liquidity, and the resulting lack of available liquidity can lead to widespread defaults and even bankruptcies.

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