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Financial Stability | Crisis Management

Lender of last resort function

The lender of last resort function is a standard function of central banks worldwide. It is commonly defined as the readiness of the central bank to extend loans to banks that cannot access more favourable sources of liquidity available in the market, all with a view to protecting depositors and/or preventing a systemic crisis in the financial system. The National Bank of Serbia’s role of the lender of last resort is regulated by the Decision on Terms and Manner of Granting Emergency Liquidity Assistance Loans to Banks.  Pursuant to the Decision, the National Bank extends loans to banks having temporary liquidity problems provided they have adopted an action plan for overcoming those problems.