The Bank of Canada serves as a lender of last ________ when a deposit-taking financial institution faces a ________ crisis.

Question

Quizplus · Accepted Answer

The Bank of Canada acts as a lender of last resort when a deposit-taking financial institution faces a liquidity crisis. This means that the institution is having difficulty meeting its short-term obligations and requires short-term funding to continue operating. The Bank of Canada can provide this funding to the institution as a way to maintain stability in the financial system.

The Bank of Canada Serves as a Lender of Last