Liquidity issues  The multi-faceted nature of liquidity Before moving on, it may be worth agreeing on a working definition of the term “liquidity”. Indeed, this term is often used to indicate many different things. This is a problem that has been pointed out by several contributors to a recent volume of Banque de France’s Financial Stability Review on liquidity issues.
2 For instance, Charles Goodhart notes in his contribution that the difficulty to define liquidity clearly is due to the multi-faceted nature of liquidity itself. Less charitably, Jean Tirole blames the problem on the “unfortunate habit of economists” to use this term to cover different concepts.