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The role of the government as a "lender of last resort" primarily involves providing financial assistance to those who may not be able to secure loans from traditional lending institutions. This means that the government steps in to offer support during financial difficulties, particularly for individuals or entities that are deemed too high-risk by conventional banks, often due to poor credit history, lack of collateral, or other risk factors.

The function of lending in this manner is crucial in stabilizing the economy, especially during crises when private lenders tighten their lending standards. By offering loans to those unlikely to receive funding elsewhere, the government helps to prevent deeper economic downturns, supports the flow of credit within the marketplace, and ensures that even the most vulnerable sectors have access to necessary financial resources.

In contrast, focusing exclusively on high-income individuals, large corporations, or primary mortgage lending ignores the broader purpose of this role, which encompasses a wider range of borrowers who face challenges accessing credit. By ensuring support for those unlikely to receive loans from other sources, the government fulfills its objective of maintaining economic stability and promoting financial inclusion.