The price of liquidity Having talked so far about the stock of liquidity, I will now turn to developments in the price of liquidity. While turnover appears to be lower in bond markets, the price of transacting doesn’t appear to be much different from where it has been in the past.
For example, at Banca d’Italia we have developed and now regularly use an indicator of the situation of the main banks obtained using selected tweets.3 We have improved our estimates of Foreign Direct Investment for the Balance of Payments by introducing Machine Learning classifiers.4 We are also working on other sources of information, such as credit and debit card payment data, which should help us to assess consumption, retail sales and other macroeconomic variables.5 These developments present significant challenges.