The first involves funding of volatile assets with high leverage that includes short-term, confidence sensitive debt. These structures were widely used before the crisis in the funding of MBS. The second involves “liquidity transformation,” in which the investment structure provides investors daily liquidity, but the underlying assets are far less liquid and prone to becoming quite illiquid in times of stress.
One outcome of the financial crisis was the ECB’s controversial asset purchase programme. The Governing Council has indeed decided to stop purchases, but only very slowly. Meanwhile German social security funds have been suffering enormously from the negative interest rates for a long time. Shouldn’t you be moving more quickly? Ending the asset purchase programme is a major first step.