Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.

 

Term of the day

lender of last resort

A central bank's role as the entity that lends money to commercial banks and other financial institutions when they have no other means to raise funds.

Source: Financial Times

The understanding that the central bank will always stand ready to lend money to a bank or number of banks experiencing a crisis if they cannot obtain finance from market sources.Example

The first major bank to get into financial difficulties at the onset of the recent banking crisis, in late 2007, was UK's Northern Rock -...