liquidity risk

Popular Terms
Probability of loss arising from a situation where (1) there will not be enough cash and/or cash equivalents to meet the needs of depositors and borrowers, (2) sale of illiquid assets will yield less than their fair value, or (3) illiquid assets will not be sold at the desired time due to lack of buyers.

Use 'liquidity risk' in a Sentence

After suffering major financial set-backs, Alexander was informed that his business would be at liquidity risk if he didn't hire a new financial manager.
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I was worried about the liquidity risk and that we might not have enough cash, but my manager told me that everything would be fine.
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During the 2008 Financial Crisis, U.S. Secretary of the Treasury Hank Paulson thought that the major financial institutions faced major liquidity risk because they held large numbers of subprime mortgages on their balance sheets.
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