Hence, they should be, and are, used only after a finding that broader instruments, like open market operations, are unlikely to prevent significant economic disruption. And in my view, when relatively targeted policy interventions are employed, their use should be designed to minimize moral hazard.
For example, if the central bank concludes that it must lend to individual depository institutions, any such loans should, in most situations, be on terms sufficiently onerous to encourage a quick return to market funding. The central bank will and must be involved in the management and resolution of financial crises.