Liquidity Conditions Likely To Remain Fragile: Deutsche Bank

Liquidity Conditions .... As factors affecting liquidity are unlikely to recede anytime soon, investors should get used to these conditions and factor the risk of lower liquidity into their investment decisions, states Deutsche Bank. The firm points out in its special March 2016 research report titled “Searching for liquidity” that liquidity concerns for U.S. and European corporate bond markets are not new and that the increase in "flash events" has rightly captured the attention of market participants and policymakers alike.

“Flash events” exacerbated fears of worsening liquidity conditions

The DB report highlights that “flash events” in which asset prices adjust in a sharp and sudden way have seemed to become more regular post-crisis. DB analysts argue that these events have occurred across...