As you know, Wim was professor in macro-economics at the University of Amsterdam. He obtained his PhD in 1965 on “The economic consequences of disarmament”. The evening before the promotion ceremony his friend Jan Pen called him. After having a general discussion on the topic, he pointed out that Wim had made a rather severe mistake on page so and so.
This should prevent the sort of dramatic liquidity events we saw in 2008, but it is not a cure. Banks in these situations become highly defensive. The lesson of Japan in the 1990s is that once such behaviour starts, it is hard to reverse. The point of central bank efforts is to create a bridge. The follow-up actions must be swift and sizeable.