The likelihood of not getting the desired funding at an appropriate cost or the probability of an undue loss of value in the event of a fire sale of assets is recognised as the liquidity risk. Moreover, a flat idiosyncratic liquidity risk does not necessarily translate into a similar risk...

Inadequate regulations or failure of regulations to keep pace with financial innovations could have been reasons for financial crises but equally critical contributing factors for financial distress have been inadequate internal control, false assumptions about market and liquidity, and lack of...