![]() ![]() The briefest and truest way of describing Lombard Street is to say that it is by far the greatest combination of economical power and economical delicacy that the world has even seen. ![]() He would have thought that it was of no use inventing railways (if he could have understood what a railway meant), for you would not have been able to collect the capital with which to make them.… He ends with a plug for the CFE (well, for the mission of the CFE anyway).Ī place like Lombard Street, where in all but the rarest times money can be always obtained upon good security or upon decent prospects of probable gain, is a luxury which no country has ever enjoyed.…Ī citizen of London in Queen Elizabeth’s time could not have imagined our state of mind. ![]() In an action-packed introductory chapter, Bagehot covers how financial innovation was key to the industrial revolution, the essence of leverage, and why financial firms have a tendency to foolishly blow themselves up. The most famous thing in the book is probably Bagehot’s advice to the lender of last resort: in a crisis lend quickly and freely against good collateral at a penalty rate. In 1873, Walter Bagehot published what remains one of the most perceptive and farsighted books on modern finance.
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