... by passing legislation and ensuring the implementation of new procedures to ratify any existing market incoherence or failings. Tighter markets are more efficient and more desirable. By understanding friction, we can envelop it, and attempt to eradicate it. Defining the concept: Friction as a measure of liquidity Friction is a measure of liquidity, which indicates how easy it is to buy or sell assets in financial markets. H.R.Stoll, a major investigator in the field who pioneered a comparative study of friction on the NASDAQ and NYSE, states that "friction in financial markets measures the difficulty with which an asset is traded", i.e. how liquid it is. Many other attempts have been made to define the topic more rigorously, though difficulty has been found in ascertaining an all-encompassing definition of liquidity itself. So much so were academics Lippman and McCall embroiled in hammering out a rudimentary statement on liquidity that they effectively ...

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