DEFINITION of 'Emergency Credit'

A loan given by a federal reserve bank to a non-bank institution or organization when no other source of credit is available. The organization in need must examine all other potential sources of funds first. Most of these loans are longer-term, usually more than 30 days.

BREAKING DOWN 'Emergency Credit'

The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) amended the Federal Reserve Act to expand the scope of bailouts for federally-insured depository institutions.

RELATED TERMS
  1. Nonbank Banks

    Financial institutions that are not considered full-scale banks ...
  2. Depository

    On the simplest level, depository is used to refer to any place ...
  3. Federal Reserve Credit

    Refers to the process of the Federal Reserve lending funds on ...
  4. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
  5. Reserve Ratio

    The portion (expressed as a percent) of depositors' balances ...
  6. Commercial Loan

    A debt-based funding arrangement that a business can set up with ...
Related Articles
  1. Tech

    Can the Banking Industry Defend Itself Against Alternative Lending?

    If it learns to embrace fintech like its non-bank competitors have done.
  2. Investing

    How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  3. Insights

    The Mortgage Market's $1 Trillion Debt Cloud

    The value of bonds backed by risky, single-family mortgages exceeded $1 trillion in November.
  4. Personal Finance

    How To Apply For a Personal Loan

    Learn about different avenues for applying for a personal loan, and learn valuable tips to help you get your personal loan application approved.
  5. Investing

    Nonbanks Overtake Banks as Top Mortgage Issuers

    As banks retreat from lending to more risky borrowers, nonbanks have stepped in and now make up the bulk of all mortgage issuance.
  6. Personal Finance

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  7. Small Business

    Small Business Loan Vs Line of Credit: How They Differ

    Understand the differences between a small business loan and a line of credit, and learn some of the most appropriate uses for each form of financing.
  8. Personal Finance

    What's the Federal Funds Rate?

    The federal funds rate is the interest rate banks charge each other for overnight loans to meet their reserve requirements.
  9. Personal Finance

    Benefits of Federal Direct Loans

    Federal Direct Loans are the most popular federal student loans. This list of benefits will explain why.
RELATED FAQS
  1. Is the prime rate in the US different from the federal funds rate?

    Learn how the federal funds rate affects fluctuations in the prime rate and how following your bank's prime rate can help ... Read Answer >>
  2. Student loans, federal and private: what's the difference?

    Learn about the differences between federal and private student loans, and discover the types of federal funding available ... Read Answer >>
  3. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
Trading Center