Lombard Street

work by Bagehot

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June 30, 2026

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Walter Bagehot was an influential journalist and economist who edited The Economist for 17 years. His 1873 book, Lombard Street, argued for a larger central reserve held by the Bank of England. This work is considered foundational for modern theories of central banking and exchange control. Bagehot emphasized the crucial role of a central bank as a lender of last resort during financial crises, advocating for such institutions to prioritize the economy's overall health by maintaining credit lines for solvent, yet temporarily illiquid, banks.12

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Walter Bagehot
In 1873 he published Lombard Street, which, though really a tract arguing for a larger central reserve in the hands of the Bank of England, in fact contains the germ of the modern theory of central banking and exchange control. He was working on a major series of economic…
Read More
In 1873 he published Lombard Street, which, though really a tract arguing for a larger central reserve in the hands of the Bank of England, in fact contains the germ of the modern theory of central banking and exchange control. He was working on a major series of economic…
Read More