Definitions

from The American Heritage® Dictionary of the English Language, 5th Edition.

  • adjective Not readily converted into cash.
  • adjective Lacking cash or liquid assets.

from The Century Dictionary.

  • In civil and Scots law, not liquid, clear, or manifest; not ascertained and constituted either by a written obligation or by the decree of a court: said of a debt or a claim.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

  • adjective finance lacking liquidity

Etymologies

from Wiktionary, Creative Commons Attribution/Share-Alike License

From il- +‎ liquid.

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Examples

  • "Instead, a substantial portion of the bank's portfolio was placed in illiquid investments such as real estate and private equity," the SEC alleged.

    Selling a 'Fraud' Portfolio Maura Webber Sadovi 2010

  • [The] increase in illiquid investments raises concerns.

    Archive 2007-06-01 2007

  • Some market experts worry that investing in illiquid assets, despite their inherent risks, has become almost mainstream.

    Archive 2007-06-01 2007

  • As prices went against them, the hedge funds continued to add to concentrated positions in illiquid securities, making their exposure worse!

    Important Research: Skill; Investing Without Market Risk 1998

  • The film adapts "Atlas Shrugged," a steamy libertarian novel featuring the ultimate corporate long-term illiquid investment, railroads.

    BusinessWeek.com -- Top News 2011

  • A bank makes its money by "borrowing short" (deposits or repo) to "go long". (putting money in long-term illiquid assets) That means that a bank is required to hold liquid reserves and enough capital to meet its needs even in a crisis.

    CounterPunch 2010

  • A bank makes its money by "borrowing short" (deposits or repo) to "go long". (putting money in long-term illiquid assets) That means that a bank is required to hold liquid reserves and enough capital to meet its needs even in a crisis.

    CounterPunch 2010

  • Not only did financial institutions increase their risk exposure by loading up on long-term illiquid assets, (MBS, CDOs, CDSs) they also borrowed heavily on those dodgy assets so they could skim the cream off the top and add to their seven-digit incomes and lavish bonuses.

    unknown title 2009

  • I call the illiquid securities "cash for trash" because the Fed has given treasury bills or cash in exchange for these distressed mortgage backed securities.

    US Market Commentary from Seeking Alpha Avery Goodman 2008

  • But while numerous efforts to create new types of investment classes aimed at removing this imbalance (for examples, see the Founders Fund, Adeo Ressi’s The Funded and the newly launched SharesPost) have recently emerged, they fail to address the root cause, that of founders and investors being trapped in illiquid investments.

    Class R (Revenue) Stock: A New Class of Investment? 2009

Comments

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  • As intoned by Treasury Secretary Henry Paulson Jr.: "And we talked about a comprehensive approach to deal with the illiquid assets on financial institutions' balance sheets." (NY Times, front page, 9/19/08)

    September 22, 2008

  • Slightly adapted: 'The illiquid, also called the bond flayer, is an evil and expensive being, humanoid in appearance, but with a four-tentacled octopus-like wallet. These beings are feared throughout the City for their speculative abilities and usually are not without two or more debtors, financially bound, to each individual bond flayer.'

    September 22, 2008

  • In fact, trading in pennies is highly illiquid, and prices are often manipulated by forces not at all related to the business. —Fool.com: The Motley Fool

    April 8, 2010