Hence, they are and should be used only after a finding that more generalized instruments, like open market operations, are likely to be inadequate to stave off significant economic disruption. If it is determined that actions to support the credit of specific firms are necessary, such actions should be designed to minimize moral hazard.
Sometimes moral suasion will be sufficient - simply by calling attention to the potential consequences of withholding payments or credit, private parties may be persuaded that avoiding such an outcome is in their self-interest. But central banks must be careful that moral suasion is not perceived as coercion or an implied promise of official indemnification for private losses.