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THE NEW LOMBARD STREET

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.

 
 

Inroduction

 
 

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

 
 

Conclusion

 

Return to Xenophon.