why is the federal reserve called a lender of last resort 
the fed also serves the role of lender of last resort providing banks with liquidity and regulatory scrutiny to prevent them from failing and creating financial panic in the economy 11the bottom linemonetary policy employs tools used by central bankers to keep a nation s economy stable while limiting inflation and unemployment expansionary monetary policy stimulates a receding economy and contractionary monetary policy slows down an inflationary economy a nation s monetary policy is often coordinated with its fiscal policy 