BAGEHOT (Walter).
Lombard Street: A Description of the Money Market.
"AN UNDYING CLASSIC" (J.M. KEYNES).
The first edition of this seminal analysis on the British financial system, one of the greatest ever works on the merits of a central banking system, celebrated by John Maynard Keynes as “an undying classic”.
“Bagehot analysed the actual working of the banking system and was based on personal experiences and close observation. He focused on the role of the Bank of England, pointing out that since it served as a banker’s bank, was the repository of monetary reserves for the entire nation, and had immense influence on the country’s financial health, it ought to acknowledge that it functioned as a central bank. He proposed changes that would allow it to perform this role more effectively. To allow it to reduce the impact of trade cycles, he recommended that the bank increase gold reserves in prosperous times, and that in depressed periods, as a matter of policy, it advance a large amount of credit to sound businesses. The book had great influence and several of its recommendations ultimately were adopted; it was regarded as authoritative well into the twentieth century, and it made a significant contribution to the theory of central banking” (ODNB).
