Provided appropriate collateral is taken and appropriate haircuts are in place, it can do this without incurring material credit risk. In so doing, the central bank can provide society with an efficient and low-cost form of insurance against a liquidity crisis in the banking system. Indeed, it is a longstanding role of central banking to do exactly this.
[1]  I use the expression “technical monetarism” to designate the operational approach relying on a target for a monetary aggregate precisely calibrated to achieve the desired level of inflation. The word Monetarism has been used in a more general doctrinal way, referring to a set of beliefs about a particular vision of the way market economies work. [2]  See Issing, O.