Definition
A condition in which cash or funding remains available to stronger institutions and securities while becoming scarcer or more expensive for weaker tiers.
Tiering can appear before an aggregate liquidity measure looks stressed because the system is narrowing rather than failing everywhere at once. Liquidity Lens checks three cross-sectional gaps: financial commercial paper versus T-bills, high-yield versus investment-grade credit spreads, and large-bank versus small-bank cash-to-assets ratios in the Federal Reserve’s H.8 data. Wider gaps mean cushioning or funding quality is concentrating toward the stronger tier. These are display-only diagnostics; none enters the DLI headline or a combined Lens score.