[lesdeuxmagots]

Their mandate requires a stable financial system with solvent institutions and sufficient liquidity moving through the system.

By definition, solvency and liquidity at the country level depend on major asset classes maintaining some amount of value.

That baseline changes based on regulations of what can or cannot be used as collateral for different measures, what ratios institutions have to maintain, etc, but there is a floor of some sort at which point the financial system implodes and the economy collapses.

Given their powers and mandate, preventing economic collapse is of the utmost importance.

[cinquemb]

The problem with this is that no amount of efforts by CBs can cure solvency risk, and attempts to do so only exacerbate moral hazards and make those collateral valuations even more fragile since the fundamentals underlying the collateral valuations, like cashflows and trust between counterparties, will continue to decline.

[engineeringwoke]

If you shovel money into investors' mouths, they will eat it until they explode.