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Subtitle: How the Fed Became the Dealer of Last Resort, Princetron
Univ. Press, Princeton, 2011, 174 pgs., index, references, notes
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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.
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Inroduction
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Chapter One - Lombard Street: Old and New
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Chapter Two - Origins of the Present System
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Chapter Three - The Age of Management
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Chapter Four - TheArt of the Swap
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Chapter Five - What Do Dealers Do?
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Chapter Six - Learning from the Crisis
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Conclusion
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