severe stress, cuts on AAA-rated commercial mortgages would increase from 2% to 10%, and similarly for other securities. In response to this, LTCM had negotiated long-term financing with margins fixed for several weeks on many of their collateralized loans. Due to an escalating liquidity spiral, LTCM could ultimately not fund its positions in spite of its numerous measures to control funding risk. See also Liquidity (disambiguation) References Further reading External links Papers about Liquidity Risk on DefaultRisk.com Bank Liquidity Requirements: An Introduction and Overview by Douglas J. Elliott, The Brookings Institution Financial risk Market risk