Lombard loans

Lombard credit (or lombard loan) is a form of short-term secured lending, characterized by the practice of providing loans against movable collateral, today mostly in the form of account balances, securities or life insurance policies. Correspondingly, the lombard rate is a central bank lending rate charged to commercial banks for short-term loans with securities pledged as collateral. The term derives from the Lombard merchants and bankers from Northern Italy who systematized and expanded these lending techniques in medieval European trade networks, particularly in the regions of Lombardy and Tuscany. In the US, the Lombard rate was set at the top of the Federal Open Market Committee target range for the federal funds rate on March 16, 2020.