I will now first talk about liquidity and then discuss transparency issues. 1  Liquidity issues  This summer, it became more than obvious that liquidity is essential for the functioning of the financial system and thus key for financial stability.
In my view, we should make a distinction between three different types of liquidity: market liquidity, which is generally defined as an asset's ability to be easily bought and sold without causing a significant movement in its price, funding liquidity – in other words, the access to markets for funding – and monetary liquidity provided by central banks.