This must be done in close cooperation with supervisory authorities, in order to ensure that informed decisions are made and public resources are used wisely. Admittedly, the chain reactions that can be triggered by liquidity problems mean that it is sometimes difficult to determine whether a financial institution that requires liquidity assistance remains inherently solvent.
•  On specific occasions some central banks have also played an important role as a catalyst for private rescue measures (as was the case, for example, in the role played by the Federal Reserve System in the bailing out of Long-Term Capital Management in 1998). 4  BIS Review 69/2009  5.