likvidumu

Likvidum, or liquidity, is a financial concept describing the ease with which an asset can be converted into cash or a borrower can meet short-term obligations without appreciable loss of value. In finance, liquidity is often discussed in three overlapping forms: asset liquidity (how quickly an individual asset can be sold), market liquidity (the ability to buy or sell quickly with minimal price impact), and funding or funding-liquidity (the availability of cash or funding to meet obligations).

Asset liquidity is typically assessed by how readily an asset can be sold at close to its current price. Market liquidity refers to the depth and efficiency of a market, often measured by the bid-ask spread, trading volume, turnover, and the price impact of trades. Funding liquidity concerns the availability of cash or credit to meet near-term needs, including the ability of a company or financial institution to obtain funds.

Common measures include liquidity ratios for individuals and firms, such as the current ratio (current assets divided by current liabilities) and the quick ratio (excluding inventory). In markets, liquidity is reflected in spreads, market depth, and the speed of execution. Regulators monitor liquidity risk through frameworks like liquidity coverage ratios and other standards to ensure that institutions can withstand short-term stress.

Factors influencing liquidity include market conditions, transaction costs, information availability, asset characteristics, and regulatory constraints. High liquidity generally reduces funding costs and transaction costs, while illiquid assets or markets can incur larger losses when quickly liquidated. Real-world examples range from government bonds and blue-chip stocks to real estate, which tend to be less liquid.