Turning to actual developments, as I mentioned already, we saw perhaps the most appalling manifestation of such a threat in the autumn of 2008. In the early phase of the present financial crisis, precautionary hoarding of liquidity brought to a complete seizure of many segments of the market for credit. At the same time, panic sales of assets made market liquidity disappear.
Market liquidity is high when traders can easily find a price, and that price  19  See also Viñals, J. (2009), “On Monetary and Financial Stability – Past, Present And Future”, keynote speech delivered at the at the 28th SUERF Colloquium on “The Quest for Stability” at the Utrecht University School of Economics.