In financial markets, similarly, there are sophisticated and unsophisticated investors, and unless they have symmetrical information, liquidity can dry up.
I suggest that future work investigate the role of discretionary opacity in facilitating informed trade as part of the cost benefit trade-off of the opacity decision maker (e.g., managers, analysts); test the relative effects of opacity on private information, liquidity, and price correction speed; and examine how institutional investors select which opaque firms to hold.
"Maybe we can get more data points," he thought, referring to such information as liquidity requirements for co-ops.
"If a year and a half ago, the FSA had wanted higher capital adequacy, more information on liquidity, and had said it was worried about the business models at Bradford & Bingley and Northern Rock... we would have been strongly criticised for harming the competitiveness of the City of London, red tape, and over-regulation," he said.
For example, information asymmetry impacts liquidity and turnover but turnover can also directly impact liquidity if investors have different expectations on information available.
Firms, governments, and individuals all need an effective methodology based on liquidity information that plays performance deterioration warning a priori bankruptcy prediction.
Mr. Rocholl argued that regulators, but not necessarily the public at large, should have access to detailed information on banks' liquidity.
These were intended to reduce the cost of financial information and increase liquidity, which the regulators believed would improve both investor access to the market and efficiency in pricing.
Parmalat and its advisers repeatedly provided us with detailed information about its liquidity position and its liabilities, in response to our inquiries throughout the year and as recently as December 5th.
Otherwise, the market will develop information problems, and liquidity will evaporate... along with the friendship of your gambling partners.Thanks to improvements in capital markets, for the first time people can manufacture their own silver linings for every cloud.
Setting up a European Energy Exchange EEXX) in Leipzig was a nice idea, but producers have an information advantage and liquidity is scarce.A new energy bill, agreed last week and likely to be passed on July 1st, should improve competition on the grid.
