Lombard credit

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Lombard credit is the granting of credit to banks against pledged items, mostly in the form of securities or life insurance policies. The pledged items must be readily marketable; in particular, the securities 'eligible for collateral' which are registered on lists. Lending is via central banks. In the US, the Lombard rate (interest rate) was set at the top of the Federal Open Market Committee target range for the federal funds rate on March 16, 2020.^[1]

Due to the pledging of securities the credit institutions have the opportunity of acquiring money in the short term from central banks.^{[clarification needed]}