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Liquidity in finance refers to the availability of liquid assets for companies, markets, and investors. It is a key concern in financial news, particularly regarding a company's ability to pay its obligations, such as in the case of worries about ABC Corp.'s liquidity. In times of economic turmoil, central banks may increase liquidity for financial institutions to facilitate loans. Consumers may prefer to hold more liquidity for unexpected expenses. The term "liquidity" is analogous to the state of water; liquid assets are readily available for transactions, unlike frozen assets, which cannot be easily accessed.