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Lombard Street

A Description of the Money Market

Downloads: Under 100
First published: 1873
Pages: 173

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About this book

Money gathered in London banks gives traders and governments borrowing power that scattered private savings cannot provide. Walter Bagehot begins with this practical distinction in Lombard Street, his account of England's money market. He uses comparisons of bank deposits and examples of merchants financing their businesses to explain how credit changes the scale of trade. His stated aim is to make banking intelligible through concrete cases, rather than let arguments over the Act of 1844 dominate the discussion.

The analysis also follows the risks created by this concentration of money. Bagehot examines the Bank of England's reserves, the pressure of demands for gold and the consequences of governors delaying changes in interest rates. He questions whether the Bank's policies and leadership can respond quickly enough to changing conditions.

About the author

Walter Bagehot

Walter Bagehot (1826 to 1877) was an English journalist, banker, and essayist who edited The Economist for seventeen years. He wrote widely on politics, economics, and literature, and his books on the constitution and on banking, Lombard Street, remain standard references.