Market Liquidity Risk Threatens Economic Stability Across Various Sectors.
Market liquidity risk can impact how well markets function in the future, affecting asset pricing, investment management, and other economic areas. Buyers and sellers need easy access to a marketplace with enough liquidity for transactions to happen smoothly. If the market doesn't function well in the future, it can disrupt the efficiency of market allocation. This can have implications for banking, financial crises, and even government policies like monetary and fiscal policies.