## What happens when liquidity disappears from the markets?
When financial markets face a severe shortage of available liquid capital, it results in a situation known as a liquidity crisis. This situation leaves individuals and institutions in a difficult position, as they struggle to meet their financial obligations in a timely manner. Financial liquidity essentially means the ability to convert assets into cash quickly without significant losses. When this characteristic disappears, the entire economy may face severe instability and economic recession.
## Factors that exacerbate the crisis
T
View OriginalWhen financial markets face a severe shortage of available liquid capital, it results in a situation known as a liquidity crisis. This situation leaves individuals and institutions in a difficult position, as they struggle to meet their financial obligations in a timely manner. Financial liquidity essentially means the ability to convert assets into cash quickly without significant losses. When this characteristic disappears, the entire economy may face severe instability and economic recession.
## Factors that exacerbate the crisis
T