DEFINITION of 'Broad Liquidity'

A category of the money supply which includes: all funds in M3, individual holdings in accounts, savings bonds, T-bills with maturity of less than one year, commercial papers, and banker's acceptances.

BREAKING DOWN 'Broad Liquidity'

This is the widest measure of money supply. Broad liquidity can be generalized as the total amount of money issued by a central bank plus any new money created by commercial banks through lending. This is one of the economic measures that policy-makers and investors use to track and forecast inflation.

RELATED TERMS
  1. M3

    A measure of money supply that includes M2 as well as large time ...
  2. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  3. Paper Dealer

    A market maker that buys and sells extremely short-term corporate ...
  4. Money Supply

    The entire stock of currency and other liquid instruments in ...
  5. Money Market

    A segment of the financial market in which financial instruments ...
  6. Tax-Exempt Commercial Paper

    An unsecured short-term loan, usually issued to finance short-term ...
Related Articles
  1. Investing

    The Basics Of The T-Bill

    The U.S. government has two primary methods of raising capital. One is by taxing individuals, businesses, trusts and estates; and the other is by issuing fixed-income securities that are backed ...
  2. Investing

    Understanding Money Supply

    Money supply – also called money stock -- refers to the total amount of currency and other liquid financial products in an economy at a particular time.
  3. Investing

    Financial Markets: Capital vs. Money Markets

    Financial instruments with high liquidity and short maturities trade in money markets. Long-term assets trade in the capital markets.
  4. Financial Advisor

    Money Market Mayhem: The Reserve Fund Meltdown

    This event serves as a stark reminder to investors about understanding their portfolios.
  5. Retirement

    Introduction To Retirement Money Market Accounts

    Money market funds are used in retirement plans and accounts because they are liquid, stable and pay competitive rates of interest.
  6. Personal Finance

    Career Advice: Investment Banking Vs. Commercial Banking

    Read an in-depth review of the differences between a career in investment banking and a career in commercial banking, including how to decide between them.
  7. Retirement

    Money Market vs. Short-Term Bonds: A Compare and Contrast Case Study

    Discover characteristics of money market and short-term bonds, including how the investments are alike and different, and the benefits and risks each offers.
RELATED FAQS
  1. What are some examples of securities that can be found in a money market fund?

    Learn about examples of securities found in money market accounts. These securities need to be safe, liquid and of short-term ... Read Answer >>
  2. I have a short period of time (1 year or less) during which I will have money to ...

    If you only have a short period of time in which to invest your money (i.e. less than one year), there are several investment ... Read Answer >>
  3. Why is marketing important to a company in the utilities sector?

    Find out what a banker's acceptance is, how it works, and why it should be considered a safe and liquid money market instrument. Read Answer >>
  4. How can retail investors invest in commercial paper?

    Find out how individual retail investors can purchase short-term commercial paper, but why it rarely makes good investment ... Read Answer >>
  5. How can I look up average banker's acceptance yields?

    Discover what a banker's acceptance note is, how it is commonly used, and where investors can find information on available ... Read Answer >>
  6. Can a business ever be too small to issue commercial paper?

    See why market forces regulate the size of companies that issue commercial paper, even though there are no official regulations ... Read Answer >>
Trading Center