On the other hand, the liberalization of the banking system, which allowed the entry of new foreign banks into the country, enhances the quality of competition in the banking system, expands the array of financial products and services at competitive rates, encourages more foreign direct investments (FDI), and opens alternative financing opportunities to fund infrastructure projects.
I will then discuss the primary sources of liquidity in the U.S. capital markets, and attempt to interpret signals from financial asset prices in this environment. I will conclude by discussing implications for the economy and policymakers. 1  Liquidity: what is it?