The non-financial sector (households and entrepreneurs) wants to hold riskless liquid assets like checking accounts while issuing risky illiquid liabilities like consumer debt or long-term investments; the financial sector exists to take the opposite side, holding risky illiquid assets and issuing riskless liquid liabilities.
definitionpending
Speaker
Arnold KlingEvidence Quote
“so you have the what I call the non financial sector wanting to have riskless liquid assets and issue risky illiquid liabilities and what I see the financial sector is doing is taking the opposite side of that”
Created: 6/13/2026, 7:04:06 PM
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