Rêve parisien À Constantin Guys I De ce terrible paysage, Le sommeil est plein de miracles! Et, peintre fier de mon génie, Babel d'escaliers et d'arcades, Et des cataractes pesantes, Non d'arbres, mais de colonnades Des nappes d'eau s'épanchaient, bleues, C'étaient des pierres inouïes Insouciants et taciturnes, Architecte de mes féeries, Et tout, même la couleur noire, Nul astre d'ailleurs, nuls vestiges Et sur ces mouvantes merveilles II En rouvrant mes yeux pleins de flamme La pendule aux accents funèbres — Charles Baudelaire Parisian Dream To Constantin Guys I This morning I am still entranced Sleep is full of miracles! And, painter proud of his genius, Babel of arcades and stairways, And heavy waterfalls, Not with trees but with colonnades Streams of blue water flowed along There were indescribable stones Insouciant and taciturn, Architect of my fairyland, And all, even the color black, Moreover, no star, no glimmer And over these shifting wonders II Opening my eyes full of flames The clock with its death-like accent — William Aggeler, The Flowers of Evil (Fresno, CA: Academy Library Guild, 1954) Parisian Dream To Constantin Guys I Of the dread landscape that I saw, Sleep is of miracles so fain A painter, in my genius free, Babels of stairways and arcades, Ponderous cataracts there swung Not trees, but colonnades, enclosed Blue sheets of water interlay 'Twas formed of unknown stones that blazed Impassive, cold, and taciturn, Architect of my fairy scene, There all things, even the colour black, No star, no sun could be discerned, Above these moving wonders sheer II My opening eyes, as red as coal, The clock with brutal accent played — Roy Campbell, Poems of Baudelaire (New York: Pantheon Books, 1952) Parisian Dream I That marvelous landscape of my dream — Sleep, how miraculous you are — And, proud of what my art had done, Staircases and arcades there were And many a heavy cataract Tall nymphs with Titan breasts and knees Blue sheets of water, left and right, Enchanted rivers, those — with jade And many a Ganges, taciturn As architect, it tempted me And every color, even black, There was no moon, there was no sun, — A silence like eternity II I woke; my mind was bright with flame; Brutally the twelve strokes of noon — Edna St. Vincent Millay, Flowers of Evil (NY: Harper and Brothers, 1936) | ![]() | |||
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I doubt a week has gone by since last summer during which I haven't seen some pundit or other trot out Walter Bagehot's dictum that in the event of a credit crunch, the central bank should lend freely at a penalty rate. More often than not, this is contrasted with the actions of the Federal Reserve, which seems to be lending freely at very low interest rates.
Ben Bernanke, in a speech today, addressed this criticism directly:
What are the terms at which the central bank should lend freely? Bagehot argues that "these loans should only be made at a very high rate of interest". Some modern commentators have rationalized Bagehot's dictum to lend at a high or "penalty" rate as a way to mitigate moral hazard--that is, to help maintain incentives for private-sector banks to provide for adequate liquidity in advance of any crisis. I will return to the issue of moral hazard later. But it is worth pointing out briefly that, in fact, the risk of moral hazard did not appear to be Bagehot's principal motivation for recommending a high rate; rather, he saw it as a tool to dissuade unnecessary borrowing and thus to help protect the Bank of England's own finite store of liquid assets. Today, potential limitations on the central bank's lending capacity are not nearly so pressing an issue as in Bagehot's time, when the central bank's ability to provide liquidity was far more tenuous.
I'm no expert on Walter Bagehot, and in fact I admit I've never read Lombard Street. But I'll trust in Bernanke as an economic historian on this one, unless and until someone else makes a persuasive case that Bagehot's penalty rate really was designed to punish the feckless rather than just to preserve the Bank of England's limited liquidity."