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The Liquidity Risk Impact On The Entities Activating On Capital Markets

Author

Listed:
  • Ciprian-Dan COSTEA

    (The West University of Timisoara, Postdoctoral Researcher)

Abstract

The activity of the entities activating on capital markets is exposed directly to liquidity risk. When we approach this type of entities the liquidity risk has two main components: (a) the internal liquidity risk, which refers to the possibility that the financing capacity and largely, the cash flow of a specific enterprise that acts on capital markets, to be affected; (b) the market liquidity risk that covers the capacity of reselling financial assets on capital markets. Even though, during the time, these two components of liquidity risk were approached independently, recent studies consider them interdependent. We want to emphasize with this study that in the actual framework of capital markets the two components of liquidity risk should always be analyzed together, in order to provide the best premises for decision makers.

Suggested Citation

  • Ciprian-Dan COSTEA, 2014. "The Liquidity Risk Impact On The Entities Activating On Capital Markets," Management Intercultural, Romanian Foundation for Business Intelligence, Editorial Department, issue 31, pages 97-103, November.
    • Handle: RePEc:cmj:interc:y:2014:i:31:p:97-103
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    More about this item

    Keywords

    Internal liquidity risk; Market liquidity risk; Capital markets; Financial assets; Cash flow;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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