By lending to solvent institutions against illiquid collateral, central banks effectively step in to assume the liquidity risk of such assets – that is, the risk that assets can only be sold in the near term at fire sale prices. And their ability to substitute for private-sector intermediation in a panic is unlimited since they create reserves.
For the most part, the Federal Reserve priced these facilities to be attractive when markets were disrupted but not economical to potential borrowers as market functioning improved. Importantly, lending against good collateral to solvent institutions supplies liquidity, not capital, to the financial system.