BIS Review 5/2000  4  There is, for example, a consensus that the NAIRU has declined since the early 1990s. That decline translates into an increase in the level of potential output at any given time or a decline in the output gap for a given level of output.
The greater the liquidity of these assets, the less there is a mismatch – in terms of liquidity – between the assets and liabilities of these vehicles. When loans are recalled or redemption requests made, assets may need to be sold on these secondary markets to meet these liabilities. So the question arises as to the liquidity of secondary markets in times of stress.