In an earlier paper (Holmstrom and Tirole, 1998) we offered a simple model of aggregate liquidity shortages. Because firms cannot pledge their full income stream to investors, the collateral base of the economy may be too small to support an optimal long-term production plan. Firms want liquidity as insurance against future credit rationing, but in the case of aggregate liquidity shocks, the financial assets of the productive sector do not allow consumers (or their representatives) to offer the desired liquidity. There is too little collateral to back up promises of future financing. We argued that the government could play a useful role as an intermediary between consumers and firms to the extent that it can make commitments on behalf of (future) consumers. Publicly supplied liquidity, however, is costly due to tax distortions. Foreign investors may be in a better position to provide liquidity services, particularly when country shocks are idiosyncratic. The purpose of this paper is to explore how the introduction of a foreign supply of liquidity affects our earlier analysis of liquidity management. How should a country optimally make use of its limited access to foreign and domestic insurance opportunities?