In banking they talk about "liquidity" and "solvency" being two primary axes of financial difficulty. It's the common wisdom in some places to say that solvency

In banking they talk about "liquidity" and "solvency" being two primary axes of financial difficulty. It's the common wisdom in some places to say that solvency is over-emphasized in lay discussions -- that an insolvent bank can shuffle on for a long time, "dead man walking," so long as it can get its hands on cash for today and tomorrow by borrowing somewhere. On the other hand, a solvent bank with liquidity problems can die very quickly. Bank runs are an obvious example here. (In a sense you might say that all terminal solvency problems eventually manifest as liquidity problems. I guess you could argue that the reverse is true too, though.) The solution to the "solvent but illiquid" problem tends to usually be "loans from someone who is liquid." A bank may lend you money against your house or your shares, central banks loan money to deposit-keeping banks against the banks' assets (mortgages, bonds, whatever banks tend to have these days...)