Although the provision of liquidity by central banks was extremely important during the crisis after the failure of Lehman Brothers, it alone was not enough to restore the stability of the financial system. That was because the adverse feedback loop between the financial system and the real economy eroded capital positions of financial institutions and thereby confidence in their solvency significantly.
As the central issue shifted from the liquidity shortage problem to the capital shortage problem, governments were required to inject public capital and to guarantee senior debts of the financial institutions in order to  2  BIS central bankers’ speeches  restore confidence in private financial institutions.