We are really interested here in the much more taxing situation where the standing facility is not adequate. This is where the lender of last resort really has an important decision to make, about whether to lend and, if so, on what terms. 6  See Humphrey and Keleher (1984), p. 79.
4  BIS Review 43/2008  the idea came from Henry Thornton (1802) and Walter Bagehot (1873). Thornton, writing in the late 18th and early 19th centuries, saw the Old Lady of Threadneedle Street as playing a stabilising role in times of crisis, to prevent a rapid reduction in credit caused by a shrinkage of the deposit base of the banking system.