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“Liquidity risk and portfolio management: Lessons from the crisis”: This is the title of a presentation by Giampaolo Gabbi, Professor of Financial Markets and Investments at University of Siena in Italy, invited by the Luxembourg CFA (Chartered Financial Analyst) society. In an interview with LFF, he spoke about restoring the liquidity pipeline, high frequency trading and the lessons from the crisis.
What is liquidity risk?
It can be defined in two different ways. The first one is the funding liquidity risk. It has increased more dramatically since the Lehman crisis, but it existed since before then with the subprime crisis in 2007 in the United States. It is when a company, in most cases a bank, is having difficulty finding liquidity...
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