Do We Need a Lender of Last Resort?

Do We Need a Lender of Last Resort? by Nicolas Cachanosky, Ludwig von Mises Institute Scotland’s vote for independence resulted in a negative. There won’t be, for now, further discussions about what Scotland should do with its monetary institutions. Still, there is one more issue that I would like to discuss, because it transcends the particular case of Scotland, had independence been the result of the vote. There is a widespread belief that a sound banking system requires a central bank to act as a lender of last resort. In a nutshell, the argument goes as follows: there are inherent…