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Perry Mehrling


Subtitle: How the Fed Became the Dealer of Last Resort, Princetron Univ. Press, Princeton, 2011, 174 pgs., index, references, notes


Reviewer comment - The author plays off of Baghot's idea that the Bank of England became the 'lender of last resort' with the implicit mission to rescue banks in difficulty by lending them funds temporarily and at significant interest rates. He shows that in the financial crisis of 2008 the Federal Reserve, and then other foreign banks bought up securities including mortgage paper from the commercial markets, in effect becoming a financial dealer as well as a bank. His principle focus is on the 2007-8 crisis, but he provides a look back into several centuries of history to show how the situation of finance is different today. He relates this to Lombard Street in London, the historical center of inernational finance there. And it turn Lombard comes from it being a locus of the Italian (Lombard) bankers and their factor in late middle ages.




Chapter One - Lombard Street: Old and New


Chapter Two - Origins of the Present System


Chapter Three - The Age of Management


Chapter Four - TheArt of the Swap


Chapter Five - What Do Dealers Do?


Chapter Six - Learning from the Crisis




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