key services provided by the financial system (4)

no asset is totally liquid. however , financial markets and intermediaries provide trading systems for making assets more liquid. the type of assets considered to be liquid changes as financial system develops. in the united states , for instance, investors can readily sell their holdings in government securities and stocks and bonds of large corporations, making those assets very liquid. During the past two decades, the financial system has made many other assets liquid . twenty years ago , for example financial intermediaries had to hold mortgage loans and loans made to businesses until the loans were paid off . now, those institution can sell the loans to other investors and buy loans made by other institution . as a result, mortgages and other loans have become more desirable assets for savers to hold . savers are willing to accept a lower return , reducing the costs of borrowing obligations for less well-known firms . One measure of the efficiency of the financial systems is the extent to which it can transform illiquid assets into the liquid claims that savers want.