Liquidity Signalling in banking

In the last years there have been severe problems in the banking system. On top of the crisis, the financial system of several countries threatened to collapse. Banks all over the world had invested in securitized products based on the U.S. housing market. When the housing market in U.S. went down, some people could not pay their mortgage anymore. The securitized products were based on pools of financial assets split up into different risk categories. It became very hard to tell what their value was on the balance sheets of banks.