Term:
Liquidity risk
Definition:

The risk that assets may not be readily available to meet a demand for cash. Because deposit-takers’ assets are typically of longer maturity than their liabilities, monitoring deposit-takers’ liquidity risk through FSIs, such as liquid assets to total assets and liquid assets to short-term liabilities, is important for financial soundness analysis.

Domain:
Finance
Source:
IMF, 2004, Compilation Guide on Financial Soundness Indicators, IMF, Washington DC, Appendix VII, Glossary
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