Define or explain the concept of Lender of the last resort .
Advertisement Remove all ads
Solution
The Central Bank acts as the lender of last resort for the commercial banks and the government. When a commercial bank faces financial crisis and fails to obtain funds from other sources, the Central Bank plays the vital role of ‘lender of last resort’ and provides them with financial assistance in the form of credit.
Concept: Definition - Central Bank
Is there an error in this question or solution?
Advertisement Remove all ads
APPEARS IN
Advertisement Remove all ads
Advertisement Remove all ads