Liquidity squeeze

Liquidity squeeze,

Definition of Liquidity squeeze:

  1. Occurs when there is concern regarding the availability of money in the short term and thus causing reluctance among lending institutions to loan out funds from their reserves. This will typically place a hold on those reserve funds and cause the interbank market interest rate to increase. This in turn will make it more expensive for banks to borrow funds from each other.

Meaning of Liquidity squeeze & Liquidity squeeze Definition