3.6.Venter

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  1. Liquidity Black Holes
    Exist when a mkt price disruption impact investor behavior in a such way as to cause even further decline in the price of these assets
  2. Reins as a form of capital
    Insr typically rely on reins as a substitute for holding capital
  3. Liquidity Model Needs
    • Important to include specific stress scenarios, and account for dynamic responses to:
    • 1. possiblity and consequence of other mkt participants simultaneously following the same strategies
    • 2. possibility of liquid assets becoming illiquid
    • 3. possibility that off-balance sheet commitments might be triggered
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65083
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3.6.Venter
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Venter
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