ML-Implode News - Liquidity, Kill Switches Are the Talk of the Currency Universe

Pension funds, hedge funds and other asset managers were seeking answers after a string of so-called flash crashes in recent months sent some of the world's most-traded currencies plunging. New Zealand's dollar, the Norwegian krone and South Africa's rand have all become victims to the phenomenon, as regulation pushes banks to reduce their size and cut down on market making. The ability to exchange currencies rapidly and cheaply is vital to everyone from importers and exporters to central banks seeking to ensure the smooth functioning of global markets.
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Liquidity was the buzzword of the conference, namely because some say it's drying up during periods of turbulence. That's making the execution of large orders more difficult amid bouts of volatility that have flared up since the Swiss National Bank shocked markets by abandoning its currency's cap against the euro last January.
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"A lot of the electronification of the market, which by and large is a good thing, has led to kill switches on a lot of that algorithmic-provided liquidity," Crownover said. "The liquidity just dries up in a stressed market."

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Liquidity, Kill Switches Are the Talk of the Currency Universe