To effectively deploy countercyclical measures, we also need to improve our capabilities to predict business cycles at the aggregate and sectoral levels, and identify them in real time. This will require better quality of economic and financial data as well as improved analytical capabilities. IV. Liquidity risk management: BCBS proposals  21.
The financial turmoil highlighted the feedback loops through which institutional liquidity constraints cascade into systemic solvency crises because of interconnectedness. A typical chain reaction runs as follows.