likviditte

Likviditte is a term used in finance and economics to describe the ease with which assets can be converted into cash or used to meet short-term obligations without substantial loss of value. The concept covers both market liquidity, the ability to buy or sell an asset quickly without large price changes, and funding liquidity, the capacity of households, firms, or financial institutions to obtain cash or credit when needed.

Measurement and indicators vary by context. For individuals and companies, liquidity is often assessed with ratios such as the cash ratio, current ratio, and quick ratio, which compare liquid assets to near-term liabilities. In markets, liquidity is observed through bid-ask spreads, trading volume, and market depth, which reflect how readily participants can trade without moving prices. Regulators and financial institutions also use specialized metrics, including the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) to gauge resilience against funding stress.

Drivers of likviditte include market conditions, asset characteristics, and access to funding. Highly standardized, widely traded assets tend to be more liquid, while assets with limited counterparties or complex structures are less liquid. External factors such as monetary policy, credit conditions, and systemic stress can rapidly alter liquidity levels across markets.

Importance and risks are central to risk management and pricing. High likviditte reduces price volatility and financing costs, while low likviditte raises liquidity risk, potentially triggering funding difficulties and market dislocations. Central banks, financial institutions, and firms manage liquidity through buffers, lines of credit, emergency facilities, and stress testing to maintain stability in normal and stressed conditions.