Financial crises have become more frequent over the last two decades than they were previously. This book illuminates the fierce debate over how the monetary authorities should handle these crises by bringing together a selection of the best writings on the subject and by reflecting all viewpoints.

• 1: Charles Goodhart and Gerhard Illing: Introduction


• 2: Xavier Freixas, Curzio Giannini, Glenn Hoggarth, and Farouk Soussa: Lender of Last Resort---a Review of the Literature


• I. Historical Analysis


• 4: Walter Bagehot: A General View of Lombard Street (excerpts)


• 5: Thomas Humphrey and Robert Keleher: The Lender of Last Resort: a Historical Perspective


• 6: Michael Bordo: The Lender of Last Resort: Alternative Views and Historical Experience


• 7: Richard Timberlake: The Central Banking Role of Clearinghouse Associations


• II. Contemporary Analysis


• 9: George Kaufman: Lender of Last Resort: a Contemporary Perspective


• 10: Fred Hirsch: The Bagehot Problem


• 11: Robert Solow: On the Lender of Last Resort


• 12: M. J. Flannery: Financial Crises, Payment System Problems, and Discount Window Lending (excerpts)


• 13: Charles Goodhart: Myths about the Lender of Last Resort


• III. Bank Runs and Contagion


• 15: Douglas W. Diamond and Philip Dybvig: Bank Runs, Deposit Insurance, and Liquidity


• 16: Franklin Allen and Douglas Gale: Optimal Currency Crises


• 17: Y. Chen: Banking Panics: the Role of the First-Come, First-Served Rule and Information Externalities


• 18: Franklin Allen and Douglas Gale: Financial Contagion


• 19: Xavier Freixas, Bruno M. Parigi, and Jean-Charles Rochet: Systemic Risk, Interbank Relations, and Liquidity Provision by the Central Bank


• IV. An International Lender of Last Resort?


• 21: Anna Schwartz: Earmarks of a Lender of Last Resort


• 22: Meltzer Report of the International Financial Institution Advisory Commission (excerpts)


• 23: R. Brealey: The Asian Crisis: Lessons for Crisis Management and Prevention


• 24: Stanley Fischer: On the Need for an International Lender of Last Resort


• 25: Curzio Giannini: Pitfalls in International Crisis Lending

Charles Goodhart is Professor of Banking and Finance at the London School of Economics and Political Science. Prior to this he was Chief Adviser at the Bank of England (1980 to 1985).
Gerhard Illing is Professor of Macroeconomics at the University of Munich.