As a result, all of this excess liquidity is flowing to the financial sector rather than the real economy.

In Germany, banks earn close to nothing on the hundreds of billions of euros of excess liquidity that they have deposited at the ECB.

If they remove the stimulus too soon by raising taxes, cutting spending, and mopping up the excess liquidity, the economy may fall back into recession and deflation.

Lowering volatility and sopping up excess liquidity can be beneficial, but there are risks here as well regulators can easily overshoot the mark, leaving financial markets with weakened capacity for price discovery and too little liquidity.

China s Excess Capacity Nightmare

The Fed s policy of quantitative easing exacerbates the flow of excess liquidity, which could result in dangerous bubbles in emerging markets.

The Liquidity Puzzle

Liquidity position

3. Liquidity ratio

The Liquidity Time Bomb

Is Liquidity Enough?

And that is opposed illiquidity.

Illiquidity is a different situation.

Instead, excess liquidity and fresh asset bubbles could emerge in the world s financial and housing markets, impeding, if not torpedoing, growth.

When the economy starts recovering, and banks start lending, will they be able to drain the liquidity smoothly out of the system? Will America face a bout of inflation?

Confronting the Coming Liquidity Crisis

NET DECREASE IN LIQUIDITY Notes

Liquidity position 33 35

So what is illiquidity?

Why is cash necessary at all?

So the key emerging issue for policymakers is to decide when to mop up the excess liquidity and normalize policy rates and when to raise taxes and cut government spending (and in which combination).

The QE exit strategy, if the Fed ever summons the courage to pull it off, would do little more than redirect surplus liquidity from higher yielding developing markets back to home markets.

The liquidity policy will be monitored against the new liquidity trend in future audits.

Banks are currently holding more than 700 billion of surplus liquidity at the ECB, earning only one quarter of 1 interest. This assures a large and ready market for the bills at 1 or less.

America s hyper aggressive fiscal response means a faster rise in government debt, while its hyper expansive monetary policy means that an exit strategy to mop up all the excess liquidity will be difficult to execute. Government spending in the US has risen in short order from 18 to 28 of income, while the US Federal Reserve has effectively tripled its balance sheet.

Statement IV. Liquidity position (consolidated) . 33

Assets are always equal to liabilities plus equity.

So I'm going to describe what illiquidity means to you.

So that is a loan to prevent a liquidity crisis.

Liquidity is still very high.

There are still a few million surplus workers in Central Asia.

He started selling surplus parts, kits, to schools and stuff.

G. Liquidity available cash versus liabilities

Finally, Spaniards could borrow excess German savings and increase consumption and investment.

In normal times, there are valid reasons for paying interest on excess reserves.

NATO has been involved in the destruction of a number of surplus stockpiles.

Increased programme expenditures have also eroded the excess liquidity.

As a result, China now faces the problem of short term excess capacity.

Investors might choose other places for their excess cash, like banks.

Some excess equipment has been redeployed to the United Nations Operation in Mozambique.

PM Last night we gave it a few too many turns and it tried to bash the roof out also.

The IMF recently established the Short Term Liquidity Facility to help strong performing members facing temporary liquidity problems.

Liquidity position as at 31 December 1993 . 105

The liquidity position is assessed on the following basis

This is slowing the absorption into the economy of the excess resources in the construction industry.