After the global financial turmoil

After the global financial turmoil (2008) many banks had serious problem with their liquidity. The shareholders did not have confidence in their banks and as a result many of them withdraw their funds. All of this has a serious impact in the market conditions because depicts rapidly liquidity can vanish, and that problem of cash flow can last a significant period of time (Basel Committee, 2008b). Liquidity is about having access to cash when you need it. This phenomenon can be caused when there is extreme demand for loans, as a result to banks do not have the ability to pay their liabilities (e.g. loans from other banks). Central banks play a major role to the solvency of banks liquidity.