Walter Bagehot's view of lender-of-last-resort support requires modification as the financial system and the role of central banks has become more complex, new research from the New York Federal Reserve posits.

Boradly, Bagehot's view on lender of last resort support was that central banks should lend freely at a high rate, on good collateralto institutions that were illiquid but not insolvent.

But the research shows that the appropriate principles for central banks' lender-of-last-resort