Walter Bagehot s Lombard Street, published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system Bagehot s book set down the principles that helped define the role of modern central banks, particularly in times of crisis but the recent global financial meltdown has posed unforeseen challenges The New Lombard Street lays out the innovative principles needed to address the instability of today s markets and to rebuild our financial system Revealing how we arrived at the current crisis, Perry Mehrling traces the evolution of ideas and institutions in the American banking system since the establishment of the Federal Reserve in 1913 He explains how the Fed took classic central banking wisdom from Britain and Europe and adapted it to America s unique and considerably volatile financial conditions Mehrling demonstrates how the Fed increasingly found itself serving as the dealer of last resort to ensure the liquidity of securities markets most dramatically amid the recent financial crisis Now, as fallout from the crisis forces the Fed to adapt in unprecedented ways, new principles are needed to guide it In The New Lombard Street, Mehrling persuasively argues for a return to the classic central bankers money view, which looks to the money market to assess risk and restore faith in our financial system....
|Title||:||The New Lombard Street: How the Fed Became the Dealer of Last Resort|
|Publisher||:||Princeton University Press November 28, 2010|
|Number of Pages||:||192 pages|
|File Size||:||868 KB|
|Status||:||Available For Download|
|Last checked||:||21 Minutes ago!|
The New Lombard Street: How the Fed Became the Dealer of Last Resort Reviews
Provides great insight into the Feds behavior and motives. Both of which are so often misrepresented by mainstream media and politicians.
This book packs a good punch in a relatively short read. It provides good detail on the actual mechanics behind modern central banking and interbank activity. I think that many of us are befuddled somewhat about the debates on QE, capital ratios, etc. This book will help shed some light on what is going on behind the scenes and what it might mean for the financial system.
An excellent book exploring what exactly the Fed has tried and should try to do. Written in plain English! A kind of central banking intellectual history leading up to the 2008 crisis tied to a very hands on explanation of the importance of liquidity. Very happy to see Coursera ( the outfit offering free online courses) will offer Mehrling's course at Columbia starting in May.
Like many other professors who teach undergraduate courses in monetary theory (after the standard money and banking courses) I've been frustrated with where the field has headed. Sure, we can rake over the coals of monetarists versus Keynesians, and students should know the nature of the fires that created those coals. But those theories have been coopted by politicans for their own purposes. And, sure, the students should be exposed to the advanced econometric models (such as the DSGE), which are very elegant. But none of them forecasted the collapse of the financial sector in 2007-2008. So we should deal with monetary theory as it applies to modern central banking. Mehrling's insight is that the Fed is now the dealer of last resort, rather than just the lender of last resort. He walks the student through all the theories, so that a professor who want to have students focus on one or another can delve more deeply (I'm assigning addtional readings in Bagehot, Hawtrey, Wicksell, and Minsky, and even on DSGE)). But in the end Mehrling provides a firm understanding of where the Fed and other central banks are right now, trying to create rational monetary policy in a world of fiscal policy failures.
Reading this book was an intellectual adventure, an endeavor as delightful as challenging, particularly, in combinatiion with the author's course "Money and Banking" at the Barnard College (by the way, an online course sponsored by the Institute for New Economic Thinking).
Excellent worth every penny...
Took his online class. I would say Prof Mehrling is one of my favorite professor.
Very interesting read.