Market liquidity reflects the ability of buyers or sellers of financial assets to affect trades without inducing large changes in asset prices. How should this be appropriately measured? Private sector participants in financial markets have expressed concern about the impact of regulations introduced since the financial crisis on market liquidity. Regulators have argued that the impact of regulation has been small and that liquidity remains sufficient to avoid excessive price volatility in markets.
On November 15, the Initiative on Business and Public Policy at Brookings hosted a conference exploring a range of views on this topic featuring a keynote address by Stanley Fischer, vice-chairman of the Federal Reserve Board, as well as a panel discussion on risk management and financial regulation from leading policy experts. After the panel discussion, panelists took questions from the audience.
Read Stanley Fischer’s prepared remarks on the Federal Reserve’s website.