All dried up

Liquidity risk

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Risk models have suggested that August's liquidity crisis sparked the kind of market events that come along once every hundred thousand years or so. Those conclusions have been widely derided. The only thing Michael Reuther - a member of Commerzbank's executive board - is certain of is that he has seen nothing like it in his 20 years in the banking industry: "The interbank market and swaths of the fixed-income market dried up. At the same time, even the riskier portions of equity markets con

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