Liquidity risk also arises from the failure to recognize or address changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value (Basel , 35 . Liquidity and the lack thereof is probably the risk that has traditionally received the least focus and yet has inflicted the greatest damage . Understanding the liquidity of a portfolio is a critical component of effective risk management (Engemann . Market participants generally view illiquidity in securities markets in one of...











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