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This report examines the effectiveness of central banks' measures taken to calm short-term interest rate volatility and to address funding market pressures during the early phase of the financial crisis (2007-08). The corresponding recommendations cover the need (1) for liquidity provision frameworks to be capable of achieving the desired policy rate target, (2) for central banks to be capable of conducting operations with an extensive set of counterparties and against a broad range of collateral, (3) for central banks to be prepared to expand their intermediation activities, (4) for central banks to strengthen their capacity to counter problems in the international distribution of liquidity, (5) for central banks to enhance their communication with market participants and the media during times of stress, (6) for central banks to continue efforts to reduce stigma associated with emergency lending facilities, and (7) for central banks to weigh carefully the expected benefits of actions to re-establish liquidity against their potential moral hazard costs. The specific ways that central banks may choose to implement these recommendations will depend upon the circumstances and the individual central bank's situation.