A ‘Group Washing Machine’ and ‘Tangled Skein’: The Failure of Slater Walker
In August 1977 the Bank of England rescued Slater Walker Limited, buying the bank for above fair value after a series of bailouts. The group, built by Jim Slater, had used depositor and policyholder funds to finance acquisitions and intra‑group lending, creating exposures that exceeded capital and sparking a liquidity crisis. The BoE provided a £130 million (~$165 million) facility, a £40 million (~$51 million) guarantee, and ultimately purchased the bank, transferring about £5 million (~$6.4 million) to the parent to repay loanstocks. The episode highlights enduring supervisory challenges around conflicts of interest and ring‑fencing when banks and insurers belong to larger conglomerates.
The Quantity Theory of Crypto: What Is Bitcoin Worth as a Medium of Exchange?
John Lewis applies the quantity theory of money to Bitcoin, treating it solely as a medium of exchange. He shows that Bitcoin's price equals the value of transactions it supports divided by its fixed supply and velocity, revealing that current...
Agentic Commerce and the Battleground for New Payments Infrastructure
Agentic commerce—AI agents that recommend, negotiate, and pay for users—is emerging rapidly, prompting a shift from human‑initiated to agent‑initiated transactions. Visa proposes a four‑step framework that moves agents from product recommendation to full‑lifecycle payment orchestration. The fragmented landscape of identity...
What Machines Taking over Pricing Means for Central Banks
Algorithmic and AI‑driven pricing is rapidly reducing the cost of price changes, halving the average lifespan of US retail prices and accelerating the frequency of online adjustments. Empirical studies show faster pass‑through of exchange‑rate and commodity shocks, while margin effects...
A Public-Private Partnership: Central Banks as a Funding Backstop
The authors analyze the Bank of England’s 2012 Funding for Lending Scheme (FLS) and find that central‑bank liquidity acts as a backstop that improves private wholesale funding conditions rather than merely substituting for them. By lowering banks’ wholesale funding costs,...