ECB Sparks Fight for Bagehot’s Legacy as Greek Crisis Tests Role

If only present-day central bankers could ask Walter Bagehot what to do about Greece.

The 19th century English economist formulated the golden rule of central banking, that in a financial panic the monetary authority should lend “quickly, freely, readily, at a high rate, to all that bring good securities.” Yet in the current crisis, the European Central Bank has struggled to make that dictum count.