Is liquidity an offshoot of economic crisis or management crisis? I think a bit of both. In short, banks and FIs are destined to be facing the unpredictability they like to believe as non-existent. Liquidity crises, although recurrent, are yet to be effectively managed. Responses are varied and such crises leave a trail of devastation clearly visible in the post crisis stage.
BIS Review 8/2010  7  Chart 8: Bank lending rates on loans to households in the euro area (percentages per annum) Short-term  Long-term house purchase (over 5 and up to 10 years) house purchase (over 10 years) consumer credit (over 1 and up to 5 years) consumer credit (over 5 years) house purchase (over 1 and up to 5 years) 7-year government bond yield  house purchase consumer credit three-month Euribor 10.0 9.0  10.0  8.0  9.0  7.0  8.0  6.0  7.0  5.0  6.0  4.0 5.0  3.0 4.0  2.0  3.0  1.0  2.0  0.0 2003  2005  2007  2003  2009  2005  2007  2009  Source: ECB and ECB calculations.