That's what they should do. I don't see why it hasn't been done earlier. The Fed and other central banks should become the interbank lending market and also lend to every large company that needs it. Lenders would lend to the Fed with a guarantee of being paid back , Fed would lend to those with borrowing needs. Do this for all type of lending, CP, long term debt etc. Also we should do away with mark to market accounting, firms would post results in two formats one with an estimated fair value of assets and another based on mark to market but with amore flexible method of accounting when there is no market. Rating agencies would work on the basis of the former Guarantee all bank deposits. Shut down the CDS market over time, along with other OTC derivatives that were only created for bankers . Reintroduce the uptick rule, a nickel spread, , along with a downtick rule to buy. And 10 % circuit breakers for stocks on the upside and downside, in this way once circuit breakers are in effect only X number of transactions can take place in a given time period in a given price deviation. Same circuit breakers for futures. That would be short term fixes, after that you take care of future bubbles with reforming the Fed and the housing market (to continental Europe model).