To be fair, the lender of last resort isn't necessarily printing/creating money in the long term.
If it is simply a classic bank run, and everyone wants their money back now, the lender of last resort could take over all of the distressed bank's illiquid assets and, over time, recover some or all of the lent moneys.
In this case, what the lender of last resort is really doing is making all illiquid assets liquid.
If it is simply a classic bank run, and everyone wants their money back now, the lender of last resort could take over all of the distressed bank's illiquid assets and, over time, recover some or all of the lent moneys.
In this case, what the lender of last resort is really doing is making all illiquid assets liquid.