For most of my time as deputy governor the financial and economic environment was, and indeed still is, relatively benign. But the question that I found myself asking was: are vulnerabilities mounting behind this benign exterior and will they one day crystallise when a bigger shock arrives that the market simply cannot absorb? The fact is we just don't know and for this reason we need to be particularly vigilant.

In my mind, this raises questions about liquidity: the focus of this article. If a