Lombard Street: A Description of the Money Market

Walter Bagehot

Book cover

An incredibly modern book, though written in the 19th century. Bagehot is often cited for his dictum that in a crisis, the central bank should lend freely, at a penalty rate. I am not sure whether someone not interested in the history of central banking would agree, but I found the book quite lively and the descriptions of the 19th-century financial world colorful and engaging. Bagehot’s understanding of contagion, liquidity, and the role of the central bank in a crisis is remarkable. Oddly enough, I think someone interested in understanding the crisis of 2008 could do much worse than to read “Lombard Street.”

My Goodreads rating: 4 stars