Lombard Street: A Description of the Money Market (Wiley Investment Classics) (Hardcover)

by Walter Bagehot (Author) "I VENTURE to call this Essay 'Lombard Street,' and not the 'Money Market,' or any such phrase, because I wish to deal, and to show..." (more)
Key Phrases: sole banking reserve, apprehension minimum, loanable capital, Bank of England, German Government, Bank of France (more...)

Editorial Reviews

Amazon.com Review
People panicked during a credit crunch or economic downturn on London's Lombard Street of the 1800s just as they do on Wall Street today. That's only one reason this reprint of the classic book by famed 19th-century economist Walter Bagehot offers lessons even now. First published in 1873, the book is a compilation of 11 essays that Bagehot wrote as the editor of The Economist, and includes his advice to banks for dealing with financial crises: "We must keep a great store of ready money always available, and advance out of it very freely in periods of panic, and in times of incipient alarm. Any notion that money is not to be had, or that it may not be had at any price, only raises alarm to panic and enhances panic to madness."

In terms of the U.S. savings-and-loan crisis and the Asian economic meltdown of the 1990s, Bagehot's words still ring as timely, even with the dated references to British politics of the time. For example, he proposed allowing unstable banks to collapse and advocated creating an independent finance professional to run the nation's central bank. Lombard Street, named after London's financial district and the birthplace of the money market, will be an eye opener for students and others interested in the history and workings of financial systems. --Dan Ring --This text refers to the Paperback edition.

Product Description
"I have lost track of how many times over the years I have either reread this book in its entirety or dipped into it to refresh my memory of its wisdom."—From the Foreword by Peter L. Bernstein author of Against the Gods.

First published in 1873, this classic book is a timeless excursion through Lombard Street, the original district of finance and the birthplace of the money market. Written by esteemed British economist and historian Walter Bagehot, it delivers observations, insights, and truths that ring as true today as they did more than a century ago.

Acclaim for Lombard Street.

"Walter Bagehot was a great economist and a great writer—though there is a question as to which was the greater. Lombard Street, first published in 1873, is more than ever timely in the age of Asian financial flu, Long-Term Capital Management, problems in Russia, Brazil, and on the horizon elsewhere. Central bankers and finance ministers such as Alan Greenspan and Robert Rubin in the U.S., along with leading IMF officials should each sleep with a copy under his or her pillow."—Charles P. Kindleberger author of Manias, Panics and Crashes

"The briefest and truest way of describing Lombard Street is to say that it is by far the greatest combination of economical power and economical delicacy that the world has ever seen."—Walter Bagehot

The English precursor to Wall Street, London's Lombard Street is the original district of finance and the birthplace of the money market. Fast-paced and highly-charged, it is a hotbed of financial activity whose impact is felt not just nationally, but globally. Though similar in many ways to its American counterpart, this "unequalled fund of floating money" nevertheless possesses a character all its own, the essence of which was brilliantly captured more than a century ago in Lombard Street.

The chef d'oeuvre of Walter Bagehot, Lombard Street began as a series of articles the esteemed essayist and financial advisor had written for the Economist during the 1850s. First published in book form in 1873, it is a vivid description of the money market that seamlessly brings together theoretical analyses, historical anecdotes, and incisive commentary on sociology, politics, and the Street's various personalities.

Sharing his invaluable insights and unique observations, Bagehot touches on everything from the mechanics of deposit banking within a fractional reserve system to the nature of foreign deposits in Britain. Along with a clear explanation of why economic growth and rising living standards are dependent upon a well-managed financial system, he offers straightforward guidelines for the function of lender-of-last resort; a penetrating look at the consequences of uncontrolled credit and speculation; and an in-depth examination of the role of the exchequer in the money market that includes a stimulating analysis of the interaction between the government's fiscal operations and the functioning of the Bank of England, the commercial banks, and the money market. Perhaps most importantly, Lombard Street features Bagehot's prescription for crisis management, which after nearly 150 years, remains the formula of choice for containing—and curtailing—financial crises.

Filled with descriptions of Lombard Street that still ring true today, this jewel of a book has withstood the test of time to become a true investment classic—one that will appeal as much to the readers of today as it did to those of years ago.

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Product Details

• Hardcover: 359 pages
• Publisher: Wiley (April 2, 1999)
• Language: English
• ISBN-10: 0471344990
• ISBN-13: 978-0471344995
• Product Dimensions: 8.8 x 6 x 1.4 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars See all reviews (8 customer reviews)
• Amazon.com Sales Rank: #1,351,793 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

13 of 13 people found the following review helpful:

5.0 out of 5 stars A classic must-read, August 1, 2001

By	R. Nord "ro-no" (Washington, DC USA) - See all my reviews (REAL NAME)

This review is from: Lombard Street: A Description of the Money Market (Wiley Investment Classics) (Paperback)

Walter Bagehot was the first editor of the now world-famous Economist magazine, which has in many ways remained faithful to the liberal philosophy (in a European sense)of its founder. Lombard Street might be difficult to read at first, but as with Charles Dickens once you get used to the style the tale is riveting. And his advice on how a central bank, as the lender of last resort, should behave in the face of a banking crisis remains valid to this day.

19 of 21 people found the following review helpful:

2.0 out of 5 stars Very Thorough, yet Tough to Read, January 31, 2001

By	F. Lybrand "Black Mesa" (Chapel Hill, NC US) - See all my reviews (REAL NAME)

This review is from: Lombard Street: A Description of the Money Market (Wiley Investment Classics) (Paperback)

Wiley Investment Classics generally fall into two categories, tough and dreary reads full of information, and lively entertaining accounts which also educate. Unfortunately, Mr. Bagehot and Mr. Bernstein's text is the former. The book does an outstanding job of promoting the importance of a strong central banking system and the importance of strict credit control when combating financial crises. However, it does so amidst extremely repetitive and somewhat painful language. The authors provide outstanding quantitative and anecdotal evidence supporting their case, but they do so in such a way that makes the book a true labor to read.

This book would be very beneficial to anyone doing research on, or working for some kind of central banking organization. Otherwise, I would suggest looking to any of the other Wiley Investment Classics for a more interesting and educational read about finance.

7 of 7 people found the following review helpful:

5.0 out of 5 stars The human face of finance, November 23, 2003

By	N. Tsafos (Washington, DC) - See all my reviews (REAL NAME)

This review is from: Lombard Street: A Description of the Money Market (Wiley Investment Classics) (Paperback)

Can a book about finance written in 1873 be helpful in a world with complex financial markets and plenty of information about how they work? The answer is yes. It is not that "Lombard Street" is a classic that one finds quoted many a time; the reader's interest should transcend historical inquiry or curiosity; "Lombard Street" should be read and revered by anyone interested in the underlying, abiding features of financial markets.

But what are those characteristics? Bagehot, then editor of The Economist, writes that credit centers on trust: "Credit means that a certain confidence is given, a certain trust reposed." And, banks always have on-demand liabilities that far exceed their readily available assets. In short, credit works on trust, and the system, in the absence of trust, can fall apart rapidly.

What follows from these premises is a careful examination of how the money market came about, what its uses are, how its operations are connected to trade and country's overall welfare, and, most importantly, how central banks can deal with financial crises. Written elegantly, "Lombard Street" is, at the same time, an introductory overview of the market and a trenchant analysis of its most salient features.

But what makes "Lombard Street" timeless is that it deals with finance in its human form. Bagehot talks about power, prestige and perception as much as he does about interest, discount, and credit. Trust is based on institutions and people: the human features of finance-trust, anxiety, mania, optimism-are timeless and apply to the financial markets of the nineteenth, twentieth, or twenty-first century. That is why "Lombard Street" is an ever useful introduction and guide.