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Finance Dictionary and Glossary of Investment Terms
Lender of Last Resort
An institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty.
Traditionally the Federal Reserve Bank in the U.S., which assists banks that face large withdrawals of funds and in so doing stabilizes the banking system.
A function of a central bank, such as the Federal Reserve, in which it lends money to a bank which is facing unusually heavy withdrawals.