We examine the liquidity effects of the euro area sovereign debt crisis, including its effects on euro area banks as a group, on intra-euro area financial flows, on the supply of and demand for collateral, and on international liquidity. The lending capacity of the euro area banking system has...

The financial crisis has heightened the awareness of the risk of a sudden shortage of foreign currencies. Governments and central banks are looking for ways to obtain “liquidity assurance”, i.e., the assurance of having access to international liquidity if they need it. This article...