2  BIS Review 69/2007  The chart on the left of slide 6 introduces a composite indicator of financial market liquidity in the euro area equity, bond, foreign exchange and credit markets. It is constructed to gauge three different dimensions of market liquidity. The first dimension is tightness , that is the magnitude of risk premiums required by market-makers for holding inventories of securities, and it is measured by the bid-ask spread. The second dimension is depth and resiliency , that is the degree to which the volume of transactions impacts on asset prices, and it is measured by using ratios of asset price movements to transactions. The third dimension relates to liquidity risk premia, that is, the compensation required by investors for the risk that attempts to unwind positions could be challenged by uncertain market conditions in the future. This is measured using yield spreads between securities which are known to have varying degrees of liquidity. The evolution of this indicator over time confirms that financial market liquidity has increased significantly since 2001. It rose sharply in 2003 and 2004 and markets have remained very liquid since then. The increase in market liquidity may reflect structural changes in financial markets; for example, the liberalisation of international flows of capital, the securitisation of loans, the development of new financial instruments, and the rapidly growing market presence of highly active financial market participants, such as hedge funds.
Speeches  Published Date: 29 April 2021  "Inflation & Expectations" - Opening Remarks by Mr Edward S Robinson, Deputy Managing Director (Economic Policy) & Chief Economist, Monetary Authority of Singapore, at the Seminar on Inflation and Cost of Living in Singapore and Asia on 29 April 2021 Introduction 1. Thank you for inviting the MAS to join this virtual webinar and live discussion on “Inflation and Cost of Living”, a joint initiative of the Sim Kee Boon Institute for Financial Economics, the IMF Institute and DBS Bank. It is encouraging that academia, industry and an intergovernmental organisation have come together on an important issue of common concern. 2. I recall launching the Singapore Index of Inflation Expectations or SInDEx, as it was known then at SMU in January 2012, and it is heartening to see it nurtured over the past decade. The MAS is grateful to the SKBI for its commitment to this project and to DBS for its generous sponsorship of the DBS-SKBI-SMU Singapore Index of Inflation Expectations, that counts among the key indicators that MAS looks at in its economic surveillance. 3. My comments are in two parts. First, I will make some broad observations on the somewhat complex inflation dynamics that confront us since the onset of COVID-19. Second, I intend to reiterate the important role that expectations play in driving the behaviour of key macroeconomic phenomena, including inflation.