Lombard Street: A Description of the Money Market

An analysis of the money market examines London’s concentrated banking system, the mechanisms of discount and short-term credit, and the conditions that produce panics. It explains how deposits and a ready loan-fund create great but delicate economic power, surveys practical operations of bankers and bill markets, and evaluates the effects of regulatory changes without dwelling on abstract theory. Emphasizing concrete practice, it identifies causes of liquidity crises and recommends central-bank responses: supply funds freely, against good collateral, and at penal rates to staunch runs. The work connects banking organization, foreign lending, and commercial confidence to financial stability.