Some of these episodes have been experienced in the market for inter-bank unsecured loans, a key component of the money market and the starting point of the monetary transmission mechanism. Moreover, liquidity has also dried up in the market for mortgage-backed securities and commercial paper as well as for structured credit products.
And, occasionally, poor liquidity conditions have been reported in markets for securities historically regarded as very liquid and safe, such as the market for banks’ secured covered bonds or, even, the government bonds of some developed economies.