Lombard rate
- noun
- UK
:
tasa Lombard
- By September, the German Lombard rate had reached an extraordinary 9.75 percent—a 61-year high.
Examples
-
Adjustments to the Lombard rate can significantly impact borrowing costs for financial institutions.
-
The central bank announced a rise in the Lombard rate to provide stability in the banking sector.
-
Banks rely on the Lombard rate to manage short-term liquidity needs.
Synonyms
6
4.9
Interest rate a central bank charges banks for borrowing money
1
4.6
The interest rate that a country's central bank sets for loans to commercial banks
Surface Forms
Morphology
Although 'rate' is a transparent word, 'Lombard' is a proper name/technical historical term (or an inhabitant) that does not by itself indicate a central-bank short-term lending facility. The compound is specialist banking jargon whose specific meaning (an interest rate for secured very short-term central bank loans) cannot be predicted from the parts, so a B1 learner knowing the constituents would not reliably infer it.
Etymology
The term Lombard rate comes from old bankers from Lombardy in Italy called Lombards, who lent money when people left goods as a pledge, like at a pawnshop. That's why today the 'Lombard rate' means the interest a central bank charges on very short loans to other banks when those loans are backed by approved items.