The question as to under what circumstances and to what extent should safety nets be extended to non-deposit taking institutions has been widely debated. The basic underpinning of the LOLR philosophy internationally has been that any institution whose failure is conclusively decided to cause broader systemic instability needs to be supported in the interregnum.
As long as banks were the only institutions fulfilling this criterion, the case was straightforward. However, with the development of global financial markets and growth on non-banks as alternate media of financial intermediation, the decisions were not so simple as the recent experience has clearly shown.