Lombard rate

Lombard (“banker or moneylender”)

Lombard rate (plural Lombard rates)

1. (finance) An interest rate charged by a central bank for very short-term loans to other banks against an approved collateral.

The term has been used internationally mainly to refer to an interest rate applied by the German central bank, the Bundesbank, but it has been used also in other countries. Other names are used of similar facilities by other central banks. After introduction of euro, the ECB uses the term marginal lending rate of a similar interest rate.