Central banks in Great Britain and the United States arose early in the financial revolution. The Bank of England was created in 1694 while the first Banks of the United States appeared in 1791–1811 and 1816–36, and were followed by the Independent Treasury, 1846–1914. These institutions, together with the Suffolk Bank and the New York Clearing House, exercised important central banking function before the creation of the Federal Reserve System in 1913. In this 2005 book, significant monetary changes in the lives of these British and American institutions are examined within a framework that deals with the knowledge and behavior of central bankers and their interactions with economists and politicians. Central bankers' behavior has shown considerable continuity in the influence of incentives and their interest in the stability of the financial markets.
• Only recent financial history title comparing the US Fed and the Bank of England in depth • Author has been writing on the topic for over 35 years and is well known • Writing is clear, accessible and engaging
1. Understanding monetary policy; 2. An introduction to central bankers; 3. Making a central bank: I. Surviving; 4. Making a central bank: II. Looking for a rule; 5. Making a central bank: III. Ends and means; 6. Central banking in the United States, 1790–1914; 7. Before the crash: the origins and early years of the Federal Reserve; 8. The fall and rise of the Federal Reserve, 1929–51; 9. Central banking in the United States after the Great Depression, 1951–71; 10. The Bank of England after 1914; 11. Rules vs. authorities; 12. Permanent suspension; 13. Back to the beginning? New contracts for new companies.
'The forces and personalities shaping the development of central banking are carefully detailed in this excellent and readable book on central banking in the United States and Great Britain.' Lee Hoskins, Former President, Federal Reserve Bank of Cleveland
'The book is an ambitious and successful undertaking. It should be required reading for anyone concerned with monetary institutions and the battle between rules and discretion in policymaking. John H. Wood makes clear that the conflicts between rules and discretion will continue, and through his deft historical analysis he reminds us that the choices we make today will have important consequences for the future.' Edward Prescott, Nobel Laureate, Federal Reserve Bank of Minneapolis
'By bringing the pieces together and focusing on the evolution of central bankers this book enables the reader to see the forest rather than the trees and to appreciate one of the successes of economics. This book will be a useful resource for both economic historians and monetary economists looking for a broad overview of the evolution of Anglo-American central banking and monetary theory.' Angela Redish, EH.Net
'Economists and ordinary people have always found it difficult to understand central bankers. John H. Wood here provides a reason: central bankers themselves quite often did not fully understand their functions and the impacts of their decisions on macroeconomic outcomes. That finally has changed, Wood argues, because central banks now appear to have a 'contract' to provide price-level stability, and they can deliver on it. But the contract may be tenuous, as it is subject to political exigencies. Wood's rich history of British and American experience thus prepares us to think seriously about the future of central banking.' Richard Sylla, New York University
'John Wood has undertaken the ambitious and novel task of retelling the old story of central banking by juxtaposing the histories of the Bank of England and the Federal Reserve, including its precursors, with the object of revealing the similarities and diversities of the challenges as well as their responses. A distinctive and singular achievement.' Elmus Wicker, Indiana University
'The book does an excellent job in providing a coherent, detailed and readable account of the forces and personalities that have shaped the development of central banking in Britain and the United States.' Central Banking
'This is a well-written, highly readable book … Throughout the book, Wood makes excellent use of his (mostly published) sources. He quotes extensively - often the quotes tell the story more or less by themselves - and he cleverly juxtaposes quotes from different eras, thereby demonstrating that time and circumstances may change but the basic issues in central banking by and large remain the same. … In short, Wood's book offers a catalogue of central banking theory brought to life through a vivid depiction of more than two centuries of central banking practice.' Financial History Review