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20 October, 2021

What are the causes for liquidity crisis of a bank

Causes of recent liquidity crisis of banking sector Liquidity refers to the supply of the means of payments of an economy. In Bangladesh, the totality of liquidity is indicated by what is called 'broad money 'or M2. A shortage of money restricts demand by making it more difficult to engage in transactions. Investment is particularly susceptible to liquidity. Now the main causes of liquidity crisis of banking sector are given below: