Lombard Street - A Description of the Money Market

Lombard Street is Walter Bagehot's famous explanation of the England central banking system established during the 19th century.

At the time of writing, the United Kingdom was at the peak of its influence. The Bank of England in London, was one of the most powerful institutions in the world. Working as an economist at the time, Walter Bagehot sets about explaining how the British government and the Bank of England interact. Leading on from this, he explains how the Bank of England and other banks - the Joint-Stock and Private banking companies - do the business of finance. 

Bagehot is not afraid to admit that life at the bank is usually quite boring, albeit punctuated by short periods of sudden excitement. The sudden boom of a market, or sudden fluctuations in the credit system, can create an excited demand for money. The eruption of an economic depression, which Bagehot aptly notes is rapidly contagious around different sectors of the economy, can also make working in the bank a lot less tedious. 

In the 19th century, the world's currencies were tied to the gold standard - the value of gold bullion. As a result, the Bank of England kept a vast repository of gold in its underground vaults as a means of solidifying its own influence and economic authority. Bagehot goes great lengths to explain this system, which was only discarded following the Great Depression of the 1920s. 

In writing this book, Walter Bagehot sought to demystify an increasingly complex and intricate financial system. At the time he published this book in 1873, the UK was the world's foremost economic powerhouse, with rapid industrialization and technological advances underpinning its global prominence. This edition is inclusive of the appendix and all of the original charts.