CIO Insights

The paradox of liquidity (it dries up when most needed) remains one of the key challenges for investors on the aftermath of the great fi nancial crisis and it is resurfacing in this late fi nancial cycle phase.

Assuming that different asset classes should remain liquid at any time can fuel a false sense of security and result in a lack of preparation for future possible tensions. This issue is in part due to the fact that liquidity has been poorly defi ned, with confusion between macro (the systemic liquidity provided by central banks) and micro (market liquidity at asset class levels) liquidity.