Therefore, proper design and implementation of liquidity regulations such as the LCR should take account of these interdependencies. In particular, policymakers should aim to strike a balance between reducing reliance on the LOLR on the one hand and moderating the costs created by liquidity shortages on the other hand – especially those shortages that crop up in times of severe market strain.
And, as always, we should be prepared to learn from experience as we go. 18  This presumes that the bank in question is able to present adequate collateral to the central bank to secure the central bank credit line. 8  BIS central bankers’ speeches