Lombard Banking

Lombard banking refers to a type of lending where banks provide loans secured by collateral, typically in the form of liquid assets like stocks or bonds. Named after the Lombard bankers of medieval Italy, this practice allows borrowers to access credit without selling their investments. The collateral serves as security for the loan, which means if the borrower fails to repay, the bank can seize the assets. Lombard banking is commonly used for short-term financing needs and helps individuals and businesses manage liquidity while still retaining ownership of their investments.