These actions alleviated the problems at the very short-end of the interbank market, although longer-term rates have not yet fully adjusted and spreads between these rates and policy rates remain relatively wide. Although overall liquidity is adequate, the circulation of this liquidity has been disrupted.
It was believed that free capital flows into the financial markets are necessary for efficient allocation of resources and for completion of markets by providing more liquidity. The potency of this argument has at least partly been dented by the crisis which has demonstrated that pursuit of development of financial markets per se cannot be an end in itself.