market liquidity risk


market liquidity risk
The potential that an institution cannot easily unwind or offset specific exposures, such as investments held as liquidity reserves, without incurring a loss because of inadequate market depth or market disruptions. One of the three primary components of liquidity risk along with mismatch liquidity risk and liquidity contingency risk. American Banker Glossary

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market liquidity risk UK US noun [C or U] FINANCE
the degree to which it will be difficult to sell an asset quickly enough to avoid losing money or to make enough profit: »

Some assets have a low market liquidity risk.

the degree to which it will be difficult for an organization to get money quickly enough to pay its debts or make necessary payments: »

Effective market liquidity risk management helps to ensure a bank's ability to meet its cash flow obligations.


Financial and business terms. 2012.