Second, intervention should be graduated, or commensurate with the severity of the problem. iii. Third, intervention should be well designed, using the right tools for the job: marketbased transactions, provided through auction mechanisms, should be used to deal with market-wide liquidity problems, while loans should be used to address liquidity shortages affecting specific institutions. iv.
Fourth, intervention should be at market-determined prices to minimize distortions and under conditions aligned with those in the market, to limit the possibility that the central bank will crowd out the return of markets. v.  Fifth, and finally, the Bank should mitigate the moral hazard of its intervention.