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The New Lombard Street: How the Fed Became the Dealer of Last Resort
How the U.S. Federal Reserve began actively intervening in markets
Walter Bagehot's Lombard Street , published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system. Bagehot's book set down the principles that helped define the role of modern central banks, particularly in times of crisis―but the recent global financial meltdown has posed unforeseen challenges. The New Lombard Street lays out the innovative principles needed to address the instability of today's markets and to rebuild our financial system.
Revealing how we arrived at the current crisis, Perry Mehrling traces the evolution of ideas and institutions in the American banking system since the establishment of the Federal Reserve in 1913. He explains how the Fed took classic central banking wisdom from Britain and Europe and adapted it to America's unique and considerably more volatile financial conditions. Mehrling demonstrates how the Fed increasingly found itself serving as the dealer of last resort to ensure the liquidity of securities markets―most dramatically amid the recent financial crisis. Now, as fallout from the crisis forces the Fed to adapt in unprecedented ways, new principles are needed to guide it. In The New Lombard Street , Mehrling persuasively argues for a return to the classic central bankers' "money view," which looks to the money market to assess risk and restore faith in our financial system.
Walter Bagehot's Lombard Street , published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system. Bagehot's book set down the principles that helped define the role of modern central banks, particularly in times of crisis―but the recent global financial meltdown has posed unforeseen challenges. The New Lombard Street lays out the innovative principles needed to address the instability of today's markets and to rebuild our financial system.
Revealing how we arrived at the current crisis, Perry Mehrling traces the evolution of ideas and institutions in the American banking system since the establishment of the Federal Reserve in 1913. He explains how the Fed took classic central banking wisdom from Britain and Europe and adapted it to America's unique and considerably more volatile financial conditions. Mehrling demonstrates how the Fed increasingly found itself serving as the dealer of last resort to ensure the liquidity of securities markets―most dramatically amid the recent financial crisis. Now, as fallout from the crisis forces the Fed to adapt in unprecedented ways, new principles are needed to guide it. In The New Lombard Street , Mehrling persuasively argues for a return to the classic central bankers' "money view," which looks to the money market to assess risk and restore faith in our financial system.
192 pages, Hardcover
First published January 1, 2010
78 people are currently reading
998 people want to read
About the author
Perry G. Mehrling
8 books63 followersPerry G. Mehrling (born August 14, 1959) is professor of economics at Barnard College in New York City. He specializes in the study of financial theory within the history of economics.
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Displaying 1 - 24 of 24 reviews
February 2, 2019
Excellent explanation about the new money/liquidity crisis that was unlike past crises. The swaps markets were money claims and the regulators and the banks were watching their credit liabilities and not this market because AIG. Also an update to Bagehot--fed is dealer of last resort--not just lender of last resort.
November 23, 2013
I read this book in conjunction with taking the author's Coursera class on the economics of money and banking (superb) so my review is colored by having that course in the back of my mind. The book ties together the big ideas while the course provides some of the technical plumbing behind these ideas, so they fit quite well; the book also likely stands alone quite well as a work of financial and intellectual history. It is relatively short; the first few chapters discuss the history of central banking (tracing it from the Bank of England and Walter Bagehot's principle of lending freely at a high rate during times of crisis, as expressed in the original Lombard Street), as well as the evolution of ideas of monetary economics which fed into how central banking was conducted; the last two chapters retrace the more recent history of the financial crisis and look at -- in the light of the foregoing monetary ideas -- how the Fed's actions fit into this framework.
The central idea is the American financial system, since the early 20th C, is unique for the link between money markets and capital markets (due to the banks holding of long term bonds for capital investment, as opposed to the short term commercial bills dominant in England) -- and thus that it is key to watch not only funding liquidity but also market liquidity in the monitoring of the credit cycle. This connection is made even stronger with the growth of shadow banking, which Mehrling defines broadly as money market funding of capital market lending (e.g. ABS backed by repo). This structure means that during a liquidity crisis, the Fed cannot only backstop banks funding liquidity (which seemed to work at first because the shadow banking system collapsed onto the formal banking system, as the parent banks were contractually obliged to take the securities back onto own balance sheet when the SIV repo funding dried up) but must also support market liquidity, by expanding its own balance sheet. Mehrling traces central bank history to show these actions are not unique to our day but were previously used in different contexts.
In that respect it is excellent, the most lucid analysis of the crisis and of the Fed's response I have yet seen, and set into a clear intellectual framework. However, the limitation -- and the reason it is a four and not five star -- is that its conclusion isn't far reaching enough. The books ends with the suggestion that the Fed, having successfully used emergency tools to support market liquidity, learn its lesson and change its framework and mission to formalize the goal of not only maintaining price stability but also managing system liquidity, and not only by targetting short end rates but by committing to backstop market liquidity when necessary. However the suggestion ends there without delving further into questions that immediately come to mind. For example: Is the implication is that the Fed was right to expand its balance sheet, and that it should also be relatively easy to reverse that process and sell back the securities to the market -- should we not be at all worried then? What does Mehrling have to say about the current state of monetary looseness -- granted the actions were right during crisis, but is policy now too loose for too long, and does that matter (book published 2011 so perhaps this is not a fair criticism)? Since the Fed could do what it needed with emergency innovation, why is there a need to change its framework and mandate? Finally, if Fed is asked to support market liquidity, does this run into the question of what extent of price collapse should it be expected to step in, how do you measure fair value of distressed assets (surely the job of market participants rather than the central bank; though Mehrling makes the subtle point that it can be structured that the Fed takes liquidity risk and the Treasury takes the credit risk) and how much moral hazard does this introduce?
The central idea is the American financial system, since the early 20th C, is unique for the link between money markets and capital markets (due to the banks holding of long term bonds for capital investment, as opposed to the short term commercial bills dominant in England) -- and thus that it is key to watch not only funding liquidity but also market liquidity in the monitoring of the credit cycle. This connection is made even stronger with the growth of shadow banking, which Mehrling defines broadly as money market funding of capital market lending (e.g. ABS backed by repo). This structure means that during a liquidity crisis, the Fed cannot only backstop banks funding liquidity (which seemed to work at first because the shadow banking system collapsed onto the formal banking system, as the parent banks were contractually obliged to take the securities back onto own balance sheet when the SIV repo funding dried up) but must also support market liquidity, by expanding its own balance sheet. Mehrling traces central bank history to show these actions are not unique to our day but were previously used in different contexts.
In that respect it is excellent, the most lucid analysis of the crisis and of the Fed's response I have yet seen, and set into a clear intellectual framework. However, the limitation -- and the reason it is a four and not five star -- is that its conclusion isn't far reaching enough. The books ends with the suggestion that the Fed, having successfully used emergency tools to support market liquidity, learn its lesson and change its framework and mission to formalize the goal of not only maintaining price stability but also managing system liquidity, and not only by targetting short end rates but by committing to backstop market liquidity when necessary. However the suggestion ends there without delving further into questions that immediately come to mind. For example: Is the implication is that the Fed was right to expand its balance sheet, and that it should also be relatively easy to reverse that process and sell back the securities to the market -- should we not be at all worried then? What does Mehrling have to say about the current state of monetary looseness -- granted the actions were right during crisis, but is policy now too loose for too long, and does that matter (book published 2011 so perhaps this is not a fair criticism)? Since the Fed could do what it needed with emergency innovation, why is there a need to change its framework and mandate? Finally, if Fed is asked to support market liquidity, does this run into the question of what extent of price collapse should it be expected to step in, how do you measure fair value of distressed assets (surely the job of market participants rather than the central bank; though Mehrling makes the subtle point that it can be structured that the Fed takes liquidity risk and the Treasury takes the credit risk) and how much moral hazard does this introduce?
July 23, 2015
Like most of Perry Mehrling's books, this one demonstrates deep scholarship and original thinking, and although there's much to disagree with as always, there's even more that provokes thought and reflection.
This book basically synthesizes Mehrling's other two works (one on the institutionalist monetary thought of the 1910s through 1950s, and the other on Fischer Black's work on the Capital Asset Pricing Model) and uses them to analyze the recent financial crisis. Trying to place himself between the "fiscal" and the "financial" view of the business cycle, Mehrling argues for the "money" view, where it is the loss of liquidity of financial and other assets that leads to crises and disruptions. He makes a compelling case that beginning with economist (and Brookings Institution head) Harold Moulton's work in 1918, the federal government and especially the Federal Reserve worked to make all financial assets "shiftable" at all times, and thus provide a ready source of liquidity to any market in danger. While not technically a "bailout" the promise to temporarily buy and sell all financial assets, whether they were for short or long terms, obvious or opaque, lead the financial and intellectual worlds to believe that "liquidity" was a free good that didn't have to be modeled (such as in the economic work of James Tobin or Arrow and Debreu) or accounted for in business, and that therefore the amount of cold hard cash ready at hand for businesses was not a concern.
The explosion of currency swaps, and then interest rate swaps and then credit default swaps (the latter two the direct result of capital asset pricing model theories by people like Black), which acted like loans but did not have the same banking networks and regulations, lead to increasingly illiquid and opaque financial markets. All of the producers of these assets acted as if only risk, and not liquidity (or the ability to time inflows and outflows of cash), as the only problem that needed to be solved or insured against. When the liquidity in these markets dry up, however, chaos broke out.
Mehrling thus celebrates the efforts of the Federal REserve to be the dealer for all potential assets in the system during this time of crisis (similar to Walter Bagehot's "Lender of Last Resort" role for the Bank of England in his 1870s "Lombard Street" book). From the 2007 creation of a Term Auction Facility, to a host of other facilities to calm money market mutual funds, commercial paper markets, and mortgage markets, the Fed provided the liquidity that the market needed, both by borrowing and lending, on both sides of the market, as a "dealer." Yet Mehrling still worries that the excessive and free provision of liquidity by the government can cause regular asset bubbles that need to be popped early.
After reading the book I'm still not sure how Mehrling defines "ease" or "discipline" at the Fed, except for more money coming in or out, or how he plans to identify and pop asset bubbles early, or how to balance "dealer of last resort" with the prevention of bubbles, but the book can't help but get you to think about these issues. For an original interpretation of the crisis and its ties to past economic thought and practice, this is a great place to go.
This book basically synthesizes Mehrling's other two works (one on the institutionalist monetary thought of the 1910s through 1950s, and the other on Fischer Black's work on the Capital Asset Pricing Model) and uses them to analyze the recent financial crisis. Trying to place himself between the "fiscal" and the "financial" view of the business cycle, Mehrling argues for the "money" view, where it is the loss of liquidity of financial and other assets that leads to crises and disruptions. He makes a compelling case that beginning with economist (and Brookings Institution head) Harold Moulton's work in 1918, the federal government and especially the Federal Reserve worked to make all financial assets "shiftable" at all times, and thus provide a ready source of liquidity to any market in danger. While not technically a "bailout" the promise to temporarily buy and sell all financial assets, whether they were for short or long terms, obvious or opaque, lead the financial and intellectual worlds to believe that "liquidity" was a free good that didn't have to be modeled (such as in the economic work of James Tobin or Arrow and Debreu) or accounted for in business, and that therefore the amount of cold hard cash ready at hand for businesses was not a concern.
The explosion of currency swaps, and then interest rate swaps and then credit default swaps (the latter two the direct result of capital asset pricing model theories by people like Black), which acted like loans but did not have the same banking networks and regulations, lead to increasingly illiquid and opaque financial markets. All of the producers of these assets acted as if only risk, and not liquidity (or the ability to time inflows and outflows of cash), as the only problem that needed to be solved or insured against. When the liquidity in these markets dry up, however, chaos broke out.
Mehrling thus celebrates the efforts of the Federal REserve to be the dealer for all potential assets in the system during this time of crisis (similar to Walter Bagehot's "Lender of Last Resort" role for the Bank of England in his 1870s "Lombard Street" book). From the 2007 creation of a Term Auction Facility, to a host of other facilities to calm money market mutual funds, commercial paper markets, and mortgage markets, the Fed provided the liquidity that the market needed, both by borrowing and lending, on both sides of the market, as a "dealer." Yet Mehrling still worries that the excessive and free provision of liquidity by the government can cause regular asset bubbles that need to be popped early.
After reading the book I'm still not sure how Mehrling defines "ease" or "discipline" at the Fed, except for more money coming in or out, or how he plans to identify and pop asset bubbles early, or how to balance "dealer of last resort" with the prevention of bubbles, but the book can't help but get you to think about these issues. For an original interpretation of the crisis and its ties to past economic thought and practice, this is a great place to go.
April 13, 2022
9/10
I first read this book when it came out and enjoyed it immensely at the time, but upon rereading it now I also appreciate how much of it went over my head the first time. Mehrling is a master of weaving the economic history together with the history of economic thought to synthesize big ideas. The broad narrative follows money and banking from its traditional origins and focus on funding liquidity and central banks' role as a lender of last resort, to the new shadow banking world with its emphasis on market liquidity and the central banks' role as dealer of last resort. Along the way, Mehrling conveys an incredible amount of historical insight to bring a thoughtful perspective to the global financial crisis. Simply a must read for anyone interested in central banking and financial crises.
I first read this book when it came out and enjoyed it immensely at the time, but upon rereading it now I also appreciate how much of it went over my head the first time. Mehrling is a master of weaving the economic history together with the history of economic thought to synthesize big ideas. The broad narrative follows money and banking from its traditional origins and focus on funding liquidity and central banks' role as a lender of last resort, to the new shadow banking world with its emphasis on market liquidity and the central banks' role as dealer of last resort. Along the way, Mehrling conveys an incredible amount of historical insight to bring a thoughtful perspective to the global financial crisis. Simply a must read for anyone interested in central banking and financial crises.
March 9, 2023
Perry is a favourite of mine, and this book is a great example of his insightful scholarly work, containing much market wisdom
and a healthy disdain for the idealized fever visions of macroeconomists. And as always, he doesn’t proselytize - as is typical of writers who don’t, he is critizised for this supposed failing, despite the fact it is the cornerstone of enduring, deep research.
and a healthy disdain for the idealized fever visions of macroeconomists. And as always, he doesn’t proselytize - as is typical of writers who don’t, he is critizised for this supposed failing, despite the fact it is the cornerstone of enduring, deep research.
May 28, 2019
Clear and mind changing
Much of what I have learned when young, has been challenged significantly. It will take some time to digest this, on the one hand easy and readable book, but also conceptual challenging, and prejudice breaking book
Much of what I have learned when young, has been challenged significantly. It will take some time to digest this, on the one hand easy and readable book, but also conceptual challenging, and prejudice breaking book
December 31, 2023
The more I study it, the more convinced I am that Finance is layers and layers of arcane boredom overlaying a base layer of blood-curdling Lovecraftian horror. The movement of money and debt markets determines essentially everything around us, from the fates of presidents to the ability of any given family to feed itself, and we know absolutely nothing about it. Fundamentally, nobody really understands how it works. We are lulled into a false sense of security for years, or even a decade or two, then everything blows up and we are reminded of how little we understand. The veils of boredom that obscure this topic are psychologically useful. We can pretend that the experts know what's happening, instead of facing the horrific unknowability of the most basic underpinnings of our society.
The New Lombard Street is a serviceable, even compelling attempt to deal with the aftermath of one of those blow-ups. The 2008 financial crisis ended a particularly long period of elite confidence in the workings of the world economy. What's been interesting about the period since, is that we've never really returned to that confidence. Perry Mehrling, the author of this book, proposes a theory of how things might work. He argues convincingly that we need to return to a more nuts and bolts 19th century view that focuses more on whether or not payments can be made by this or that actor, instead of worrying about larger abstractions like asset valuations or national economies.
The book consciously models itself after "Lombard Street", a classic book that attempted to describe the actors in the London money market in the 1870s. The contrast between the two books is striking. It's a bit unnerving just how different the intricacies of the markets are 150 years later. The fundamental questions of solvency remain, but 21st century finance is infinitely more abstracted from the real economy than the 19th century one was. Mehrling elucidates shadow banking, the eurodollar market and a range of other concepts that are essential to understanding what happened in 2008. I believe this book is a great place to start if you want to begin piercing the veil of complexity surrounding finance. But at the end of the day I don't find these explanations quite as compelling as Mehrling seems to find them. If you internalize Mehrling's view, the 2008 crisis becomes more explicable, and we can tell ourselves that we can make everything else make sense again. But I can't help but suspect that the next crisis will upend everything just as much as 2008 did, and make Mehrling's money view look just as inappropriate as all the frameworks we relied on in 2007. We're all at the mercy of eldritch forces we may never be able to understand.
The New Lombard Street is a serviceable, even compelling attempt to deal with the aftermath of one of those blow-ups. The 2008 financial crisis ended a particularly long period of elite confidence in the workings of the world economy. What's been interesting about the period since, is that we've never really returned to that confidence. Perry Mehrling, the author of this book, proposes a theory of how things might work. He argues convincingly that we need to return to a more nuts and bolts 19th century view that focuses more on whether or not payments can be made by this or that actor, instead of worrying about larger abstractions like asset valuations or national economies.
The book consciously models itself after "Lombard Street", a classic book that attempted to describe the actors in the London money market in the 1870s. The contrast between the two books is striking. It's a bit unnerving just how different the intricacies of the markets are 150 years later. The fundamental questions of solvency remain, but 21st century finance is infinitely more abstracted from the real economy than the 19th century one was. Mehrling elucidates shadow banking, the eurodollar market and a range of other concepts that are essential to understanding what happened in 2008. I believe this book is a great place to start if you want to begin piercing the veil of complexity surrounding finance. But at the end of the day I don't find these explanations quite as compelling as Mehrling seems to find them. If you internalize Mehrling's view, the 2008 crisis becomes more explicable, and we can tell ourselves that we can make everything else make sense again. But I can't help but suspect that the next crisis will upend everything just as much as 2008 did, and make Mehrling's money view look just as inappropriate as all the frameworks we relied on in 2007. We're all at the mercy of eldritch forces we may never be able to understand.
January 4, 2024
Excellent analysis of the monetary mechanics behind the Great Financial Crisis.
— The book takes a „money view“, i.e. looks at the financial system from the perspective of monetary mechanics (payment process arising from settlement and clearing) as well as liquidity structures in cash and securities markets.
— As such, it finds the GFC to have been not just driven by financial misconduct and obscene risk-taking; but also by a conceptual misunderstanding of the – inherently unstable – nature of credit in the light of dealer-based credit markets.
What makes the book truly stand out is its structure and historical context.
— In terms of structure – the analysis builds up bit by bit, creating an intuitive understanding of the mechanics. Only after laying this foundation does the author get into the specificities of the GFC.
— In terms of (historical) context – the book demonstrates how the history of American central banking and the evolution of modern economics and finance intersect to make us neglect the practical rigidities of our monetary „plumbing“.
Ultimately, the author proposes that the FED accept its new role as „dealer of last resort“ – providing market liquidity to securities market. Yet, the book clearly retains its focus on analysis – less on policy prescriptions.
— The book takes a „money view“, i.e. looks at the financial system from the perspective of monetary mechanics (payment process arising from settlement and clearing) as well as liquidity structures in cash and securities markets.
— As such, it finds the GFC to have been not just driven by financial misconduct and obscene risk-taking; but also by a conceptual misunderstanding of the – inherently unstable – nature of credit in the light of dealer-based credit markets.
What makes the book truly stand out is its structure and historical context.
— In terms of structure – the analysis builds up bit by bit, creating an intuitive understanding of the mechanics. Only after laying this foundation does the author get into the specificities of the GFC.
— In terms of (historical) context – the book demonstrates how the history of American central banking and the evolution of modern economics and finance intersect to make us neglect the practical rigidities of our monetary „plumbing“.
Ultimately, the author proposes that the FED accept its new role as „dealer of last resort“ – providing market liquidity to securities market. Yet, the book clearly retains its focus on analysis – less on policy prescriptions.
January 28, 2023
Published in 2011 covering the 2008 financial crisis and how the Federal Reserve intervened. Mehrling is a historical economist, tracing the crisis back to the origins of the Fed and how the financial system created in the 1970s resulted in an inherently unstable series of debts. At 140 pages, it is a relatively quick read but still very dense in content. Having taken one of his courses, I was already familiar with his writing style and "money view" explanation of the economy, which helped to understand his arguments. He has a dry, economist's sense of humor.
June 13, 2025
Mehrling writes really well (especially for an economist) which is unsurprising given how engaging and passionate he was about explaining money markets in his Coursera thing. I don't think I can fully (or adequately) grasp the financial plumbing behind the key matters he touches on here, but his knowledge of monetary history and intellectual economic history made everything a lot more interesting, and he did a really good job of streaming through the trajectory of 20th century Fed policy concisely and accessibly (while still keeping subject-matter dense).
April 24, 2019
This book describes 'alternative' theoretical as well as practical underpinnings of the modern financial system and the role of central banks in the system. Taking into account the practices of Fed post 2008 crisis, the book proposes the revival of previously neglected intellectual traditions of banking in order to understand the system as it actually functions and to reform it for the better.
September 28, 2017
Insightful
Provides great insight into the Feds behavior and motives. Both of which are so often misrepresented by mainstream media and politicians.
Provides great insight into the Feds behavior and motives. Both of which are so often misrepresented by mainstream media and politicians.
August 18, 2019
good imo, short
July 8, 2022
Ok, but expected more.
May 21, 2023
Nothing unique
August 3, 2022
Dr. Mehrling advocates what is here called “the money view” to explain how today's world of finance assumes that liquidity as a free good, but in fact it isn’t. By emphasizing the the inherent instability of credit, the feedback loop of rising asset prices and credit expansion leads to credit-fuelled bubbles. I agree with all these ideas. However, though it is not a fault, this book is only a partial depiction of the big picture. It maintains on his money view focus and fails to account for other perspectives, such as the asset analysis and output effects. Money is only the medium for propping and measuring economic activities, the real effects are in the construction (or the destruction) of the world.
Personally, I find it hard to express fully my thoughts regarding to this topic and to put it down on words. I am still trying to absorb more and widen the frame with exposure to related topics.
Personally, I find it hard to express fully my thoughts regarding to this topic and to put it down on words. I am still trying to absorb more and widen the frame with exposure to related topics.
December 22, 2022
Highly technical book about financial crisis and the role of the fed. The book went straight over my head.
I am taking a course in coursera on money and banking and the author recommended this book as a good pre-reading. The expected level of knowledge for someone who picks up this book on finance and money markets is higher than I expected.
With that said making the effort to finish the book allowed me to be comfortable with concepts like repos, eurodollars and the importance of liquidity in financial crisis.
I am taking a course in coursera on money and banking and the author recommended this book as a good pre-reading. The expected level of knowledge for someone who picks up this book on finance and money markets is higher than I expected.
With that said making the effort to finish the book allowed me to be comfortable with concepts like repos, eurodollars and the importance of liquidity in financial crisis.
July 4, 2015
It is an inspiring book. The conventional role assigned to the Fed since its establishment was the Lender of the Last Resort, the idea behind which dated back to 19th century. But the author in this book argued that Fed was no longer only in a position to extend discount loans to financial institutions in liquidity crisis by a punishment rate as proposed by the Bagehot rule, but also has got deeply involved in the money market and capital market by holding and selling securities and other assets, as the so called the Last Dealer of Resort. Unlike what's believed in the past, the Federal funds rate, the only tool controlled by the central bank, can not be smoothly translated into the money market and asset market. Liquidity is not actually a free good. But the institutions in the current system take for granted the fact that as long as the liabilities and risks can be shifted to other institutions, they are in a safe position. It turned out they are wrong.
December 5, 2011
"The economics view and the finance view meet in the present, where cash flows emerging from past real investments meet cash commitments entered into in anticipation of an imagined future. This present is the natural sphere of the money view. But both economics and finance abstract from money; for both of them, money is just the plumbing behind the walls, taken for granted." (4)
"The point is that, in a really severe crisis, market liquidity is no longer a matter of the funding liquidity of private dealers but rather of shiftability to the Fed. If an asset is not shiftable to the Fed, it may not be shiftable at all, or only at an unacceptably large price discount. The Fed in a crisis is not so much the lender of last resort (funding liquidity) as it is the dealer of last resort (market liquidity)." (107)
"The point is that, in a really severe crisis, market liquidity is no longer a matter of the funding liquidity of private dealers but rather of shiftability to the Fed. If an asset is not shiftable to the Fed, it may not be shiftable at all, or only at an unacceptably large price discount. The Fed in a crisis is not so much the lender of last resort (funding liquidity) as it is the dealer of last resort (market liquidity)." (107)
November 27, 2014
A perfectly reasonable discourse on how the global monetary system functions, highlights on its weaknesses and historical failure points, and only briefly on the possible remedy against future systemic collapse. This book is dense, pithy, non-sensationalist, and skirts academic ideology. It requires a re-read, maybe a re-watching of the Coursera course, and is a definite must read for the oligarchy. For everyone else, it may be interesting to know that the syntax of the system has changed since the dawn of central banking, that powers have shifted from one to another, and the system always works until it doesn't.
March 18, 2016
Perry walks through the history of the Fed focusing mostly on the evolution of policy. He breaks down the recent 2008 crisis, the Fed’s actions, and the ‘plumbing’ of the financial system. The Fed has transitioned from lender of last resort to dealer of last resort. Market liquidity being the main focus in the transition.
March 20, 2016
You've heard of Credit Default Swaps, Currency Swaps, Interest Swaps, Collateralized Debt Obligations etc.. but don't understand how they're financed and want to then I think this is a good book to read.
This entire review has been hidden because of spoilers.
May 7, 2012
Brilliant. The book offers clear and interesting explanations about boring economic theories since the start of central banking practice.
Want to read
July 12, 2016Displaying 1 - 24 of 24 reviews