One issue here is the separation between the monetary authority (the ECB) and the regulators, supervisors, and bank-capitalizers-of-last-resort, and the fact that except for the ECB all the rest are national in scope.

So in the Eurozone the liquidity provision is disconnected from the supervision. This was the point of the Bruegel piece I satirised here

Last week, the think-tank Bruegel published an article entitled ESRB should act on sovereign risk containing an extremely important idea:

The ESRB is the institution uniquely placed to make such an assessment [of the systemic implications of a Greek debt restructuring]. First, it has probably the best access to the kind of data needed to make such an assessment. The ECB - providing a large part of the infrastructure of the ESRB - knows which banks use Greek bonds as collateral for the open market operations and should therefore have a good picture of exposure to Greek bonds. The ECB should also have fairly detailed information on the interbank market, from which contagion across banks can be assessed. Last but not least, the ESRB has the legal authority to request data from the national and European supervisors needed for such an assessment.  The assessment would obviously have to take into account the possible contagion effects.

Leaving aside the perhaps understandable (given the state of economic conventional wisdom) but still inexcusable (especially in an economist) confusion between open market operations (what the article says) and main refinancing operations (what the article should say, as open market operations are both anonymous and uncollaterallised), here we have a restatement of a truth which is central to Hyman Minsky's book Stabilizing and Unstable Economy. Namely, that the Central Bank should emphasize refinancing operations (i.e., collateralised lending) through the discount window (a term more familiar to the general public than main refinancing operations) over open market operations as a way to foster greater financial stability.

The Bruegel article brings into sharp focus the fact that the ECB know all this but is funcionally disconnected from "macro prudential regulation" and bank supervision.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper