If Guy Debelle was a hedge fund trader, he might have made a killing this week. Three days ago Mr Debelle – a top official at Australia’s central bank – predicted that markets were heading for wild volatility, since investors were naive about structural risks. A “sizeable” number of them, he observed, probably presumed that they could exit their positions before any sell-off. “History tells us that this is generally not a successful strategy,” he warned. “The exits tend to get jammed unexpectedly and rapidly.”

A day later his prediction came true. On Wednesday volatility exploded in the markets, prompting the price of Treasury bonds to swing wildly and European stocks and bonds to move violently. While these swings may fade in coming days, the importance of Mr Debelle’s message will not. This week’s gyrations have shown that the question of “l(fā)iquidity” – the degree to which assets can be traded – matters hugely.

What is worrying is liquidity appears to have decreased because unorthodox monetary policy experiments have collided with financial reforms and technological upheaval in an unexpectedly pernicious way. Or to cite Mr Debelle: “Market liquidity is structurally lower now than it was in the past. [This] is not evident in a rising market when assets are being bought, but will quickly become apparent in a down market.”