4  For the policy responses taken by major central banks, see Monetary Affairs Department, Bank of Japan, “Major Central Banks’ Policy Conduct during the Current Financial Crisis,” 2009 (available only in Japanese); and Brian F. Madigan, “Bagehot’s Dictum in Practice: Formulating and Implementing Policies to Combat the Financial Crisis,” speech given at the Federal Reserve Bank of Kansas City’s Annual Economic Symposium in Jackson Hole, Wyoming on August 21, 2009.
6  BIS central bankers’ speeches  Responding to the evaporation of market liquidity The second challenge was to respond to the evaporation of market liquidity. When writing about declining liquidity, Bagehot also referred to liquidity in the government bond market in a crisis, but in his time there were neither the kind of complex financial products nor the derivatives transactions we see today.