More broadly, there is a prevailing thought that if an exchange can gain a dominant share of trading in a product, it will be a natural monopoly, controlling liquidity and, to a degree, prices.
"A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity.
In December, to stem the rise of the baht and regain control of liquidity, the government made a bungled attempt to slap a tax on inward portfolio investment.
Not so Yale, which thrived in consequence.Mr Swensen argues that diversification is a better form of risk control than liquidity.
The Financial Services Authority, unable to control the liquidity of this operator on its turf, proposed in March that host countries be given more power to demand extra capital and restrict intra-group flows.
However, though Asian countries may be happy to subsidise their exporters they are not so keen to offer the same subsidy to foreign banks, pension funds or hedge funds.Capital controls are a way around what economists call the "impossible trinity": an economy cannot simultaneously control domestic liquidity, manage its exchange rate and have an open capital account.
This, he concludes, will eventually lead to vulnerabilities similar to the massive capital inflows, credit boom, overheating and bubbles that preceded the 1997 crisis.His grim prediction is based on the "impossible trinity": an economy cannot control domestic liquidity and manage its exchange rate if its capital account is open.
The practices include transparency, presenting a viable and testable model, a cap on funds and a control on liquidity.
This study controls for the human capital effect on self-employment without controlling for liquidity constraint that influence the decision to be self-employed.
