William Bagehot

William Bagehot was a 19th-century British economist and journalist renowned for his insights into the functioning of central banks and financial systems. His influential ideas emphasize the importance of central banks acting as a lender of last resort during financial crises to maintain stability. Bagehot highlighted that central banks should lend freely but at a high interest rate and only to solvent institutions, to prevent panic while discouraging reckless behavior. His work shapes modern financial policy and the principles guiding central bank interventions during economic shocks, ensuring the economy remains stable and confident during turbulent times.