1.3  The scope and limits for central banks to control leveraging cycles  Let me describe how these complications played out in the current crisis. 6  Brunnermeier M. K. and L. H. Pedersen (2009), “Market liquidity and funding liquidity”, Review of Financial Studies, vol. 22(6), pp. 2201–2238.
4  BIS central bankers’ speeches  In the early days of the financial crisis, banks were saddled with a legacy of illiquid and unprofitable assets, which they were forced to refinance. As the markets had withdrawn credit, and the price of those assets in the market had plunged, they came to central banks for refinancing.