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A lender of last resort is a financial entity that intervenes to prevent financial panics and maintain stability. Central banks like the ECB and the Federal Reserve often fulfill this role.
Lender of last resort refers to an individual, institution, or central bank that provides financial assistance to prevent financial panics and promote investor confidence by increasing the money supply, lowering interest rates, and offering loans. The central banks, such as the ECB and the Federal Reserve, commonly serve as lenders of last resort to stabilize the financial system during crises.
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