Liquidity Quotes

Housing associations have fingered the fact that they cannot use their assets as liquidity due to Bank of England rules unlike their continental equivalents. This has emerged to be one of the main bottlenecks to getting investment going in the U.K. It is a Bank of England issue.

They flooded liquidity in the marketplace but the mortgage rate is based much more on expectations of inflation. So if the average investor believes that there is inflation coming, they'll move that rate up.

Hedge funds, private equity and venture capital funds have played an important role in providing liquidity to our financial system and improving the efficiency of capital markets. But as their role has grown, so have the risks they pose.

One way to ease liquidity for banks is that the government can buy all highly rated securities held by the banks. Every single bank in the U.A.E. has some sovereign debts in their portfolios. I am not asking them to buy any junk bonds, rather the high quality U.A.E. government debt.

The Central Bank should have a permanent window for discounting high quality securities where banks could go and discount these. It gives peace of mind to the banks. In the absence of this facility, what banks tend to do is to keep a liquidity cushion for emergency requirements. This is a very expensive way of managing liquidity.