“In a liquidity crisis, otherwise healthy firms collapse because they can’t access credit. The Fed can resolve such a crisis...In a solvency crisis, companies can’t survive no matter how much they can borrow: they need more revenue. The Fed can’t solve that.” — Greg Ip, @WSJ
Which always makes me think of: "I am more concerned with the return of my money than the return on my money". - Will Rogers
Liquidity and solvency interact. For example liquidity from central banks avoided a solvency crisis and defaults from heavily indebted states in recent history. If interest rates are low enough and there is enough money willing to buy debt, you can keep anything solvent. Obviously you have to wonder what money is worth at some point. Conversely, a liquidity crisis can easily make an entity insolvent.