What is LENDER OF LAST RESORT?

National central bank authorized and resourced to be the ultimate credit source. Intended to stabilize the national or regional economy. It extends loans to solvent, illiquid depository institutions to maintain stability. With government backing such loans retain the public’s confidence in the country’s financial system. The IMF is lender of last resort if a central bank gets into difficulties. An emergency can be a run on banks.

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