While bankers say that some of the cash pool is probably being managed by the investment banks that so aggressively wooed the fund in its early days, they say it is also likely that the bulk of the assets have been kept in Libya's liquidity-rich banking system — a reflection of the country's long experience with Western-imposed sanctions.
In a generally rich market, liquidity and familiarity count for much.
But the apparent revival of capital inflows probably has less to do with confidence in Turkey's economy than the largesse of rich-world central banks, particularly the European Central Bank's massive provision of liquidity.Cheap money in the rich world has allowed Turkey to dodge an immediate crisis.
But if the intervention is not sterilised, the added liquidity fuels inflation.In the rich world, where demand is weak and deflation a risk, the calculus is different.
"U.S. financial institutions are very cash-rich, so that means a liquidity crisis would have to be extraordinary before it affects them," said Guy LeBas, the chief fixed-income strategist for Janney Montgomery Scott.
Cash is king SIR: You should find a way to factor in liquidity in your annual list of America's richest people ("The Forbes 400," Oct. 12, p. 165).
I grew a bit suspicious of that rich emollience of tone, that tempered, bourgeois liquidity.
Rich people have much less use for liquidity; they can diversify into riskier assets and can get access to the best financial and tax advice.
In the aftermath of the global financial crisis, rich-world central banks unleashed a flood of liquidity to support their own sickly economies.
The rich world's big central banks are gradually unwinding the emergency liquidity facilities they introduced at the height of the crisis.
Liquidity already pumped into the system has only made things worse: cash-rich developers have less pressure to sell houses, so they can keep ginning up prices further even as demand softens.
