But, as with capital, greater ex ante transparency about banks’ liquidity risk management frameworks, cushions and supporting arrangements should help reassure investors and counterparties and reduce the risk of sudden drains on liquidity, as well as the uncertainty that, over the past year, has led to wide and volatile liquidity premia in interbank funding markets.
As we consider how to strengthen buffers, more thought needs to be given to how to promote higher buffers above the regulatory minimum in good times, and more flexibility for  BIS Review 102/2008  3  the system to make use of these buffers when they are comfortably above regulatory minima.