Paper presented at St Louis Conference to mark anniversary of Diamond/Dybvig Paper on bank runs, St Louis
A little over 150 years ago, on Thursday 10th of May 1866, the Bank of England let one of the largest money market dealers in the world, Overend, Gurney & Co., go to the wall. Facing chaos in the markets, the Bank almost immediately made emergency liquidity available to all and sundry. The raw facts — idiosyncratic rejection, followed by system-wide support — seem strikingly similar to those just over a decade ago when, in the autumn 2008, the Federal Reserve first let Lehman fail but then extended liquidity to Wall Street and beyond.
How Technocracy Should Retreat to Preserve Our System Of Government (& Its Own Contribution to Welfare)