Perry Mehrling: The New Lombard Street: How the Fed Became the Dealer of Last Resort

The author was recently quoted as stating that the United States' Federal Reserve Bank was acting, in fact, as the world's central bank; this is a relatively straight forward notion, and actually rather self evident when you think of the greenback as the world's base currency (in terms of volume and stability and liquidity, and in terms of currency reserves held by sovereign banks). In the Sun Herald, Bradley Keoun and Hugh Son invoked the author this way: “Things would have been worse if they hadn’t lent to foreigners,” said Perry Mehrling, senior fellow at the Morin Center for Banking and Financial Law at Boston University and author of “The New Lombard Street: How the Fed became the Dealer of Last Resort.” “We’re finally getting to understand the role of the Fed in the world.” Fed spreadsheets showed the central bank became the world’s lender of last resort as dollars flowed to European banks as well as Bank of America Corp. and Wells Fargo & Co, among top borrowers from the Term Auction Facility at $45 billion each. Read that Sun Herald piece here. Recently, the author was a guest on Bloomberg Radio; download the podcast of that show here.

The Great Recession in Historical Perspective, Part 1: Introduction from Committee on Global Thought on Vimeo.