Lender of Last Resort
/ˈlɛndər ʌv læst rɪˈzɔrt/
Definitions
- (n.) An institution, typically a central bank, that provides emergency liquidity to financial institutions facing insolvency or illiquidity to prevent systemic collapse.
The central bank acted as a lender of last resort to stabilize the failing banks during the financial crisis.
Forms
- lender of last resort
- lender of last resorts
Related terms
See also
Commentary
This term is chiefly used in financial and banking law to describe a critical function of central banks during crises; legal texts may specify conditions and scope for such lending.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.