Browsing: Liquidity gap

When a mismatch or disparity exists between the supply and demand for security or between the maturity dates of securities, the phrase “liquidity gap” is used to describe the situation or mismatch. It may be used for a broad variety of different financial conditions and circumstances. When faced with cash flow challenges and possible liquidity gaps, financial institutions must make every effort to ensure that they always have sufficient cash on hand to answer consumer demands for money.