Bernanke’s Pawn Stars Cameo: It Depends on How You Define “Good”
April 03, 2011 at 21:28 PM EDT
In Walther Bagehot’s famous formulation, central banks should lend during crisis situations “against good collateral at penalty rates.” Apparently, during the maelstrom of the crisis in September, 2008, the Fed considered pretty much anything “good collateral,” except perhaps Lloyd Blankfein’s baseball card collection and a ‘72 Buick up on blocks in front of an old [...]