There is an excellent description of the tightrope of running the operations of the lender of last resort in Charles P. Kindleberger's highly acclaimed 'Manias, Panics and Crashes - A History of Financial Crises'.  It well explains the difficulty of the process, the impossibility of defining 'correct' policy and the need for avoiding a rulebook.  It concludes "As for timing, it is an art.  That says nothing-and everything".