FXStreet (Guatemala) - Analysts at BNP Paribas explained that the October issue of the International Monetary Fund's Global Financial Stability Report (GFSR) includes an analysis of the evolution of market liquidity.
Key Quotes:
"The report finds that overall market liquidity remains high, with only a few market segments showing signs of worsening liquidity.
However the report also finds that the resilience of market liquidity, i.e., the speed at which market liquidity recovers after a bad shock, may have declined significantly due to a number of structural changes.
A decline in the resilience of market liquidity is concerning at a time when the first interest rate hike by the Federal Reserve is approaching.
Indeed it provides a channel through which a rise in U.S. interest rates, while largely anticipated, may still be accompanied by significant market disruptions when it actually occurs."
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