page_title: Lender of last resort
hierarchical_section_title: Lender of last resort
caption_attribution_description: English: The Federal Reserve headquarters in Washington, DC The Federal Reserve headquarters in Washington, DC
context_page_description: A lender of last resort is the institution in a financial system that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank lending market and other facilities or sources have been exhausted. It is, in effect, a government guarantee of liquidity to financial institutions. Since the beginning of the 20th century, most central banks have been providers of lender of last resort facilities, and their functions usually also include ensuring liquidity in the financial market in general.
  The objective is to prevent economic disruption as a result of financial panics and bank runs spreading from one bank to the next from a lack of liquidity in one.
  Different definitions of the lender of last resort exist in literature. A comprehensive one is that it is "the discretionary provision of liquidity to a financial institution by the central bank in reaction to an adverse shock which causes an abnormal increase in demand for liquidity which cannot be met from an alternative source".
context_section_description: A lender of last resort (LOLR) is the institution in a financial system that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank lending market and other facilities or sources have been exhausted. It is, in effect, a government guarantee of liquidity to financial institutions. Since the beginning of the 20th century, most central banks have been providers of lender of last resort facilities, and their functions usually also include ensuring liquidity in the financial market in general. 
  The objective is to prevent economic disruption as a result of financial panics and bank runs spreading from one bank to the next from a lack of liquidity in one. 
  Different definitions of the lender of last resort exist in literature. A comprehensive one is that it is "the discretionary provision of liquidity to a financial institution (or the market as a whole) by the central bank in reaction to an adverse shock which causes an abnormal increase in demand for liquidity which cannot be met from an alternative source".
  While the concept itself had been used previously, the term "lender of last resort" was supposedly first used in its current context by Sir Francis Baring, in his Observations on the Establishment of the Bank of England, which was published in 1797.
caption: The Federal Reserve System headquarters in Washington, D.C.
exif: {"Image Make": "Canon", "Image Model": "Canon PowerShot G1", "Image Orientation": "Horizontal (normal)", "Image XResolution": "180", "Image YResolution": "180", "Image ResolutionUnit": "Pixels/Inch", "Image Software": "Adobe Photoshop Elements 8.0 Windows", "Image DateTime": "2016:12:09 11:00:04", "Image YCbCrPositioning": "Centered", "Image ExifOffset": "248", "Thumbnail Compression": "JPEG (old-style)", "Thumbnail XResolution": "72", "Thumbnail YResolution": "72", "Thumbnail ResolutionUnit": "Pixels/Inch", "Thumbnail JPEGInterchangeFormat": "1110", "Thumbnail JPEGInterchangeFormatLength": "6819", "EXIF ExposureTime": "1/500", "EXIF FNumber": "63/10", "EXIF ExifVersion": "0210", "EXIF DateTimeOriginal": "2004:09:05 12:59:18", "EXIF DateTimeDigitized": "2004:09:05 12:59:18", "EXIF ComponentsConfiguration": "YCbCr", "EXIF CompressedBitsPerPixel": "5", "EXIF ShutterSpeedValue": "287/32", "EXIF ApertureValue": "85/16", "EXIF ExposureBiasValue": "0", "EXIF MaxApertureValue": "2", "EXIF SubjectDistance": "3483/1000", "EXIF MeteringMode": "CenterWeightedAverage", "EXIF Flash": "Flash did not fire", "EXIF FocalLength": "7", "EXIF FlashPixVersion": "0100", "EXIF ColorSpace": "sRGB", "EXIF ExifImageWidth": "969", "EXIF ExifImageLength": "753", "Interoperability InteroperabilityIndex": "R98", "Interoperability InteroperabilityVersion": "[48, 49, 48, 48]", "Interoperability RelatedImageWidth": "1024", "Interoperability RelatedImageLength": "768", "EXIF InteroperabilityOffset": "960", "EXIF FocalPlaneXResolution": "512000/139", "EXIF FocalPlaneYResolution": "768000/209", "EXIF FocalPlaneResolutionUnit": "2", "EXIF SensingMethod": "One-chip color area", "EXIF FileSource": "Digital Camera"}