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Annuity owners can use the secondary market to create liquidity from an asset that usually isn't considered liquid.
Analysts say this could also draw liquidity from the market.
One prominent fear is that central banks are draining liquidity from the financial system.
That sucks liquidity from wholesale energy markets, upon which the small fry feed.
"Historically, most private company investors don't get meaningful liquidity from other private investors," Mr. Falvey said.
Grasping the joystick, players inject and remove liquidity from the economy.
They trade off the cost of delaying a payment against the cost of borrowing liquidity from the central bank.
"We must avoid the mistake of thinking that the provisioning of liquidity from the E.C.B. will stay forever," he said.
"Any counterparty where the market suspects underlying problems will have trouble finding liquidity from sources other than the E.C.B".
British banks are apparently withdrawing liquidity from abroad to provide the scarce credit they can make available in Britain.
Similar(1)
Monetary authorities drained some liquidity from the market, curbed lending and asked banks to show restraint.
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