For example, economic agents interact with each other and an asset in one institution may be a liability in another, giving rise to interdependence and to a counterparty risk. Financial institutions, such as banks, usually carry out analogous transactions that could also lead to similar risk exposures.
Supplying additional liquidity and reducing borrowing costs can greatly ameliorate the effects of market events on the economy, and those types of macroeconomic interventions will carry less potential for increasing moral hazard than would the discount window lending that was a prominent feature of crisis management when depositories funded more credit.