This preview shows page 1. Sign up to view the full content.
Unformatted text preview: healthy banks hurts the ability of less well-known borrowers to obtain loans. This impairs the efficiency of the savings-investment process. Lender of Last Resort The first type of banking regulation is the lender of last resort function. The lender of last resort is the ultimate source of credit to which banks can turn. The Federal Reserve was created to serve as the lender of last resort. The Fed failed to act as such during the Great Depression. recent episodes: • Penn Central Railroad, 1970 • Franklin National Bank, 1974 • Hunt Brothers' attempt to corner the silver market, early 1980's • 1987 stock market crash...
View Full Document
This note was uploaded on 11/22/2011 for the course FIN FIN1100 taught by Professor Bradrifkin during the Fall '09 term at Broward College.
- Fall '09
- Personal Finance