Lombard Street
"The English precursor to Wall Street, London's Lombard Street is the original district of finance and the birthplace of the money market. Fast-paced and highly-charged, it is a hotbed of financial activity whose impact is felt not just nationally, but globally." "The chef d'oeuvre of Walter Bagehot, Lombard Street began as a series of articles the esteemed essayist and financial advisor had written for the Economist during the 1850s. First published in book form in 1873, it is a vivid description of the money market that seamlessly brings together theoretical analyses, historical anecdotes, and incisive commentary on sociology, politics, and the Street's various personalities." "Perhaps most importantly, Lombard Street features Bagehot's prescription for crisis management, which after nearly 150 years, remains the formula of choice for containing - and curtailing - financial crises."--Jacket.
Stats for nerds
4recommend
8mentions
6people
2018–2025years
63% recommend38% neutral
Mentions per year
What Hacker News says
- > gold standard disincentivizes consumption, and incentivizes savings. Plain and simple
Read Walter Bagehot's Lombard Street, published in 1873 [1]. It's the treatise by arguably the world's first modern central banker. What makes it neat is it's entirely on the gold standard.
Britain, on the gold standard, still faced each of inflation, bank runs and credit crises. It was an imperial military power almost constantly at war. And yes, its contemporaries lamented its industrial consumerism and rising inequality. (And that's Victorian Britain, mind you!)
[1] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
- > America solved it in the 1800s with commodity money; the US dollar was worth as much at 1900 as it was at 1800
What? No it wasn't. The value of gold relative to commodities or industrial products wasn't stable over that interval. It would be ridiculous if it had been. Not only were we in the throes of the Industrial Revolution, the California gold rush had just started a two-century boom in the quantity of gold [1].
> there weren't any financial collapses in the 1800s comparable in magnitude to the Great Depression or Global Financial Crisis
Free banking was a constant drumbeat of bank failures, inflation and scams [2][3]. (Also financial crises [4].)
If you want a country that didn't have a civil war in the 19th century to go off, grab a copy of Bagehot's Lombard Street [5]. It's written by arguably the world's first modern central banker. He battles credit crises, bank runs, inflation, et cetera. All while Britain was firmly on the gold standard.
[1] https://elements.visualcapitalist.com/200-years-of-global-go...
[2] https://en.wikipedia.org/wiki/History_of_central_banking_in_...
[3] https://en.wikipedia.org/wiki/Wildcat_banking
[4] https://home.treasury.gov/about/history/freedmans-bank-build...
[5] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
- Money Creation in the Modern Economy. By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate. Bank of England Quarterly Bulletin. Q1, 2014.
The Man Who Knew: The Life & Times of Alan Greenspan. By Sebastian Mallaby.
The Courage to Act: A Memoir of a Crisis and its Aftermath. By Ben Bernanke.
Lombard Street: A Description of the Money Market. By Walter Bagehot.
The Future of Money. By Eswar Prasad.
(The following two are mentioned at the end of the article)
“A Monetary History of the United States, 1867-1960” by Milton Friedman and Anna Schwartz.
“The Fed and Lehman Brothers: Setting the Record Straight on a Financial Disaster” by Lawrence Ball.
- Lombard Street by Walter Bagehot
https://archive.org/details/in.ernet.dli.2015.276712
https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...
- You don't actually need lender of last resort.
If actually read the books by the inventor of the 'lender of last resort' called Walter Bagehot. He wrote on of the most famous monetary books 'Lombard Street: A Description of the Money Market (1873)'.
Modern central banks constantly refer to how they 'follow Bagehot' but actually don't.
In this book he actually makes it quite clear that the 'lender of last resort' is only need in England because he says 'Getting ride of the Bank of England would be as hard as getting ride of the monarchy' (turns out its even harder).
He specifically point out in his books that a better solution would be for England to adopt a banking system like the Scottish had where the 'lender of last resort' was not needed because banks can create their own liquidity.
'Lender of last resort' was his idea how to restrict and give a clear set of rules to the central bank so it would stop causing so many crisis that were all avoid in the free banking system of Scotland.
https://iea.org.uk/wp-content/uploads/2016/07/upldbook115pdf...
- Just finished Walter Bagehot's Lombard Street (1873). Bagehot was the editor of The Economist in the 1860s and 1870s. This book sketches out London's banking and finance system and, particularly, how liquidity crises are handled.
https://archive.org/details/lombardstreetad00bagegoog/page/n...
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