The meaning of liquidity

What is the difference between leverage and high leverage? Ask Y V Reddy, former Reserve Bank of India (RBI) governor, who was at his wittiest best at the Indian Overseas Bank’s platinum jubilee commemorative lecture. “Basically, leverage means others’ money and high leverage means that you are playing more with others’ money,” he said. And what does liquidity mean? “Liquidity has many meanings ... we have aggregate liquidity, then we have CRR [cash reserve ratio] and OMO [open market operations]. And, of course, in Hyderabad after 7 p m, liquidity means beer and whisky. That’s why we have important conferences at 5 o’clock,” he added.