Independence, liquidity and a level playing field – yet another impossible trinity?

Walter Bagehot urged the Bank of England to offer unlimited lending at high rates against good collateral

Bagehot's Lombard Street is still compulsory reading for central bankers because of its description of how a crisis evolves and what central bankers should do as lenders of last resort. However, since the financial crisis, central banks and regulators have become increasingly concerned about the potential moral hazard dimensions of Bagehot's advice. The Basel III agreement includes an

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