![]() "to avert panic, central banks should lend early and freely (ie without limit), to solvent firms, against good collateral, and at ‘high rates’". (Nonetheless, Goodhart emphasizes that many of these ideas were spelled out earlier by Henry Thornton's book The Paper Credit of Great Britain.)īagehot's dictum has been summarized by Paul Tucker as follows: ![]() Bagehot's advice (sometimes referred to as "Bagehot's dictum") for the lender of last resort during a credit crunch is summarized by Charles Goodhart as follows: Lombard Street is known for its analysis of the Bank of England's response to the Overend-Gurney crisis. When this bank suspended payments on, panic spread across London, Liverpool, Manchester, Norwich, Derby and Bristol. The book was in part a reaction to the financial collapse of Overend, Gurney and Company, a wholesale discount bank located at 65 Lombard Street, London, from which the book draws its title. The book was initially printed in Great Britain by Henry S. Bagehot was one of the first writers to describe and explain the world of international and corporate finance, banking, and money in understandable language. ![]() Lombard Street: A Description of the Money Market (1873) is a book by Walter Bagehot. ![]()
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