I'll conclude by describing the current situation and saying a few words about the Bank of Canada's role with respect to each type of liquidity. 1  K. Warsh. "Market Liquidity: Definitions and Implications." Speech to the Institute of International Bankers Annual Washington Conference, in Washington, D.C., March 2007. Available at: http://www.federalreserve.gov/newsevents/speech/Warsh20070305a.htm.
BIS Review 111/2007  1  Macroeconomic liquidity As I noted earlier, I am using the term macroeconomic liquidity to refer to "overall monetary conditions." Any economy, whether national or global, functions best when there's enough – but not too much – liquidity. So, how much is the right amount in a national economy? The answer depends on the central bank's objectives.