The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

LIQUIDITY RISK Definition & Legal Meaning

Definition & Citations:

Loss potential in a situation where (1) insufficient cash and/or cash equivalents exist to balance depositors and borrowers demand, (2) sale of illiquid assets sale yields less than their fair market value, or (3) illiquid assets with a lack of buyers, prohibiting timely sale.

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