Stress testing / Liquidity and funding risk [47]

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Bullet points include: Usual channels became closed during 2007-2009 Credit Crisis Collapse of covered bond market and of securitisation market Freezing up of commercial paper Interbank market closed except overnight interbank Governments allowed firms to borrow from them using existing limited mechanisms But reputational costs of discount window borrowing proved high Eventually governments made borrowing facilities very broadly accessible

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