Bagehot for beginners
The Making of Lender-of-Last-Resort Operations in the Mid-Nineteenth Century1
Bibliographic Data
| ID | 3485445 |
|---|---|
| Authors | Vincent Bignon (Graduate Institute of International and Development Studies), Marc Flandreau (Graduate Institute of International and Development Studies), Stefano Ugolini (0000-0002-0172-9237, Scuola Normale Superiore) |
| Year | 2012 |
| Volume | 65 |
| Issue | 2 |
| Pages | 580-608 |
| Publication date | 2012-05-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic History Review (JOURNAL) |
| Journal identifiers | ISSN: 0013-0117 • E-ISSN: 1468-0289 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/j.1468-0289.2011.00606.x |
| OpenAlex | W2047569466 |
| Language | EN |
| Citations received | 23 |
| References cited | 44 |
In this article we develop new tools to survey the development of lending-of-last-resort operations in the mid-nineteenth century. One finding is that free lending and extensive liquidity support against good collateral developed gradually after 1847, and was already a fact of life before Bagehot publishedLombard Street. Another is that the extension of the Bank of England's lender-of-last-resort function went along with a reduction of its exposure to default risks, in contrast with accounts that have associated lending of last resort with moral hazard. Finally, we provide a new interpretation of the 'high rates' advocated by Bagehot. We suggest they were meant to prevent banks from free-riding on the safety offered by the central bank, and were aimed at forcing them to keep lending during crises so as to maintain a critical degree of liquidity in the money market
Business · Central bank · Collateral · Economics · Economy · Financial system · Hazard · Lender of last resort · Market economy · Market liquidity · Monetary economics · Monetary policy · Moral hazard · Banking stability, regulation, efficiency · Economic Theory and Policy · Finance · Islamic Finance and Banking Studies
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Bagehot’s giant bubble failure
The London money market and non-British bank lending during the first globalisation
Shadow Money in the 19th Century
Eligibility to the Central Bank in Times of Crises
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The Impact of the First World War on the Spanish Money Market
Dating the Lender of Last Resort
The coevolution of banks and corporate securities markets
The establishment of banking supervision in Italy
Governing the system
Supervision without regulation
The politics of last resort lending and the Overend & Gurney crisis of 1866
Goodbye connections, hello Bagehot
The origination and distribution of money market instruments
Becoming a central bank
Not an ordinary bank but a great engine of state
Integration between the London and New York Stock Exchanges, 1825-1925
Preventing financial ruin
The evolution of central banks
Monetary Policy Implementation
A Monetary History of the United States, 1867-1960
Development of British Monetary Orthodoxy, 1797-1875
Distinguishing Panics and Information-based Bank Runs
Bank Runs, Deposit Insurance, and Liquidity
Bank Runs as an Equilibrium Phenomenon
A History of Banking Theory
The Langton Papers
History of the London Discount Market
Railway Investment, Bank of England Policy and Interest Rates, 1844-8
Bank of England Operations, 1890-1914
Fluctuations in Trade, Industry and Finance
A Monetary History of the United States, 1867-1960
The Bank of England as lender of last resort, 1857-1878
Central Bank, Peripheral Industry
The French provincial banks, the Banque de France, and bill finance, 1890-1913
| Unique citing works | 23 |
|---|---|
| Citations per year | 1,92 |
| Citation span | 2014 - 2026 (13) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 23 |