Solvency: Long-term liabilities are covered by assets(with value measured at maturity, not at market-to-market)
Liquidity: short-term liabilities are covered by assets which can be sold in the short-term.
Is this it?
Should CB lend to insolvent banks? or only to solvent but illiquid banks? This related to the problem of moral hazard, where if banks are being bailed out, more can think that their liability side is being covered by the CB/Government...