Moreover, we have developed additional tools that will allow us to drain or immobilize bank reserves as needed to facilitate the smooth withdrawal of policy accommodation when conditions warrant. If necessary, we could also tighten policy by redeeming or selling securities.
I will now first talk about liquidity and then discuss transparency issues. 1  Liquidity issues  This summer, it became more than obvious that liquidity is essential for the functioning of the financial system and thus key for financial stability.