RT Journal Article SR Electronic T1 The Cycle of Global Liquidity JF Trading FD Institutional Investor Journals SP 156 OP 165 VO 2009 IS 1 A1 Michael J Howell YR 2009 UL http://guides.pm-research.com/content/2009/1/156.abstract AB Important macro-factors determine liquidity conditions in micro-markets. Capitalism is essentially a financing system, or more correctly a re-financing system. The re-financing process is largely controlled by Central Banks via their influence on the wholesale money markets. Financial liquidity tends to move in a four- to five-year global cycle. Periods of tight liquidity trigger financial crises like 2007/08. The modern-day banking crisis no longer involves queues of retail depositors scrambling to remove their savings whenever their bank lacks reserves. Rather it is caused by asset-liability “mismatch” and an inability to re-finance short-term liabilities in the wholesale markets.