The function of providing liquidity for the banking system at times of crisis. This is one of the duties of the central bank. In the event of a run on the banks or other financial panic, the central bank should be willing to lend to soundly run banks or other financial institutions in order to avoid a general collapse of the financial system. It may be necessary to suspend temporarily the normal limits on the money supply and restrictions on the forms of collateral acceptable. If the institution in difficulties is not believed to have been soundly run, the central bank is left with a difficult decision: lending too easily may encourage other banks to take undue risks in the belief that they are ‘too big to fail’ and that the central bank will always bail them out, while if central bank assistance is withheld, the collapse of badly run institutions may also bring down good ones.