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Financial Market Liquidity and the Financial Crisis: An Assessment Using UK Data

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  • Christopher Martin
  • Costas Milas

Abstract

A steady increase in financial market liquidity followed by a rapid reduction played a central role in the financial crisis that began in 2007. We present empirical evidence that the marked rise in liquidity in 2001–07 was due to large and persistent current account deficits and loose monetary policy.

Suggested Citation

  • Christopher Martin & Costas Milas, 2010. "Financial Market Liquidity and the Financial Crisis: An Assessment Using UK Data," International Finance, Wiley Blackwell, vol. 13(3), pages 443-459, Winter.
  • Handle: RePEc:bla:intfin:v:13:y:2010:i:3:p:443-459
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    File URL: http://hdl.handle.net/10.1111/j.1468-2362.2010.01269.x
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    References listed on IDEAS

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    Cited by:

    1. Francesca Giambona & Erasmo Vassallo, 2013. "Composite Indicator of Financial Development in a Benefit-of-Doubt Approach," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 42(2), pages 171-202, July.

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