reduction in liquidity

A result was a widening of spreads, a reduction in liquidity and an increase in volatility.

The symptoms have generally included collapses in asset prices, increases in risk premiums, and general reductions in liquidity.

Under the rules, investment banks based in the US would face restrictions on how they operate in the bond market, meaning a significant reduction in liquidity.

The size of these moves can also be attributed to the significant reduction in liquidity in the FX markets, due to bank credit concerns and to investors being reluctant to trade in this environment.

At least some of that apparent reduction in liquidity is the result of the way the index has adjusted for various stock splits over the years, Mr. Birinyi said, but the rest is a phenomenon that demands further study.

Bank lending may also increase (item 3) even if there is no increase in liquidity or even a reduction in liquidity (item I is zero or negative), if banks respond to increases in the demand for loans by accepting a lower liquidity ratio.