The Covid-19 crisis has triggered the deepest liquidity squeeze since 2008. Unlike the Great Financial Crisis (GFC), an unprecedented real economy shock led to extremely quick deterioration of financial conditions and showed that, under extreme circumstances, liquidity may dry up not only within risk assets, but also within risk free ones.

The peak of this crisis hit in February/March. Market liquidity has improved noticeably since then, although it has not completely normalised yet and areas of weak liquidity remain.