Overview

A new history of crisis responses in the central bank's formative years. The long-standing description of the Federal Reserve as a ""lender of last resort"" refers to the central bank's emergency liquidity provision for financial entities in periods of crisis. As Mark Carlson shows, this function was foundational to how the Fed was designed but has, at times, proven challenging to implement. The Young Fed examines the origins of the Federal Reserve's emergency liquidity provision which, along with the setting of monetary policy, has become a critical responsibility. Focusing on the Fed's response to the financial crises of the 1920s, Carlson documents the formative deliberations of central bank policymakers regarding how to assist banks experiencing distress; the lessons that were learned; and how those lessons shaped subsequent policies. Carlson depicts an early Fed that experimented with a variety of approaches to crises, ranging from bold spectacles featuring cash-filled armored cars to behind-the-scenes interventions to prevent inducing panics or bank runs. The Young Fed weaves previously unpublished material from the Fed archives into a watershed work in American economic history: a deeply sourced account of how the world's most important central bank became a lender of last resort.

Full Product Details

Author:   Mark Carlson
Publisher:   The University of Chicago Press
Imprint:   University of Chicago Press
Dimensions:   Width: 15.20cm , Height: 2.30cm , Length: 22.90cm
Weight:   0.513kg
ISBN:  

9780226837826

ISBN 10:   0226837823
Pages:   240
Publication Date:   23 January 2025
Audience:   Professional and scholarly ,  Professional & Vocational
Format:   Hardback
Publisher's Status:   Active
Availability:   Manufactured on demand  
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Table of Contents

Acknowledgments List of Figures and Tables Chapter 1. Introduction Chapter 2. Background on the 1920s, the Banking System, and the Federal Reserve Chapter 3. Tools to Respond to Financial Stress Chapter 4. Philosophy Regarding Emergency Liquidity Support Chapter 5. Case Studies of Federal Reserve Interventions Chapter 6. The Experience of the Early 1920s and Changes in Lending Policies Chapter 7. Parallels to Modern Times and Lessons for Today Chapter 8. Conclusion Appendix 1. Episodes of Emergency Liquidity Provision in the United States Prior to the Federal Reserve Notes Appendix 2. Subsequent Use of Currency Funds Appendix 3. Federal Reserve and OCC Officials Appendix 4. Actions by FRB Atlanta during the Early 1920s in a More Macroeconomic Context Notes References Index

Reviews

“A pathbreaking book on central banking history, The Young Fed is the first detailed account of the mechanisms, motivations, and internal deliberations of the various Federal Reserve Banks during their formative first years. Written by a brilliant banking economist and financial historian, The Young Fed integrates sophisticated economic analysis with narrative, insightfully informing the discussion of central banking’s past.” -- Charles Calomiris | coauthor of ""Fragile by Design: The Political Origins of Banking Crises and Scarce Credit"" “The Federal Reserve was created to serve as a lender of last resort for the financial system of the United States. For over a century, the Fed has struggled to balance multiple objectives and challenges of this role. Mark Carlson, a leading scholar on this topic, has written a terrific book showing how we can trace this struggle back to the beginning, with fascinating case studies of the Fed’s decisions about emergency lending in the 1920s.” -- Andrew Metrick | Yale University

Author Information

Mark Carlson is an economist and advisor for the Board of Governors of the US Federal Reserve System in Washington, DC.

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