Bagehot, Walter

Walter Bagehot was a 19th-century British economist and journalist best known for his leadership as editor of "The Economist" and his ideas on financial stability. He argued that during financial crises, central banks should act decisively like a lender of last resort—providing quick, temporary support to prevent bank collapses. His principles emphasize that government intervention should be cautious but firm, ensuring confidence in the banking system without encouraging risky behavior. Bagehot's ideas greatly influenced modern central banking policies during economic downturns, emphasizing the importance of swift, measured action to maintain financial stability.