The Lender of Last Resort: Some Historical Insights
32 Pages Posted: 16 Jul 2004 Last revised: 28 Sep 2010
Date Written: June 1989
This paper discusses the role for a lender of last resort (LLR) in preventing banking panics (section I) , then briefly considers classical and more recent concepts of the LLR (section II). Section III examines historical evidence for the U.S. and other countries on the incidence of banking panics and LLR actions, and the record of alternative LLR arrangements in the U.S., Scotland and Canada, as well as the historical record on ailouts. Section IV offers some lessons from history.
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