Encumbered and unencumbered assets

Are central banks making banks riskier? They are willing to lend to banks in exchange for collateral. The collateral employed by banks for these loans is of the highest quality. These assets are now encumbered and cannot be used for other purposes. If there is a need for cash, these encumbered assets cannot be sold to raise funds. Hence, it is possible that banks will have less funds available in a crisis and they could be capital constrained. Additionally, if all the high quality assets are taken by the central bank, then there will be less available as collateral for private investors. There are strings attached to these central bank lending programs.