Question

What is the lender of last resort?

Short answer

Federal reserve bank

Step-by-step solution

Concept Introduction

Organization of theU.S.centralbank-
The Federal Reserve System isbasicallythefiscalassociationof the USAengagedinmakingopinionsregardingcapitalistforce. It notonlydecides whether to lower orraiseinterestratesand,influencemacroeconomicpolicybutalsoregulates thenation's bankingassiduitytomakesurethehealthof the bank'sbalancedistanceandcoverbankdepositors. In the USA, wecallthefiscalinstitutionthe Fed Systemconstantlydockedasjust"the Fed."

:Explanation of Solution

The FRS System (Central Bank of the USA) istrulyasemi-decentralizedassociationmanagedby ablendofappointees, fromprivate-sectorbanksalsoas from the govt. A Board of Governorscomprisingsevenmembersappointedby the President of the USA andvindicatedby the Senate runs"the Fed"on 14-timeterms.
In general, all marketable banks maintain their account with Fed where they keep their reserves. Banks take loans from the Fed which they use for check processing. Further, it'll be said that the Fed is chargeable for capitalist force and gyration within the financial system to satisfy public demands. Hence, it'll be concluded that the Fed is that the lender of last resort. During a bank pullout, the Fed way in to bear care of the finances that the bank must pay to its depositors.