---
title: Central Banking
description: Central banks set interest rates and guard financial stability. You will learn how the Fed, ECB and others operate, their tools and balance sheets, inflation targeting and the debates over their mandates.
category: finance-economics
subcategory: economics-(social-lens)
difficulty: beginner, intermediate, advanced
url: /subject/central-banking
---

# Central Banking

Central banks set interest rates and guard financial stability. You will learn how the Fed, ECB and others operate, their tools and balance sheets, inflation targeting and the debates over their mandates.

## Available Resources

3 Books • 1 Websites

## Podcasts

### 1. Macro Musings with David Beckworth

**Author:** David Beckworth

A long-running weekly interview podcast with current and former central bankers, Fed staff and monetary economists. Episodes cover Fed operating frameworks, balance sheet policy, the Treasury market, independence and the global dollar. The full archive is free.

**Difficulty:** Intermediate | **Language:** English | **Price:** Free

**Link:** https://www.mercatus.org/macro-musings

**Tags:** central-banking, federal-reserve, monetary-policy, monetary-economics, fed-balance-sheet

## Books

### 1. Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State

**Author:** Paul Tucker

A former Bank of England deputy governor asks when unelected central bankers should hold power in a democracy. Tucker proposes design principles for mandates, independence, accountability and emergency lender-of-last-resort powers. It covers the 'debates over their mandates' part of the topic at full depth, from a practitioner who is also a political theorist. This is the 2019 paperback.

**Difficulty:** Advanced | **Language:** English | **Price:** Paid

**Link:** https://www.amazon.com/dp/0691196303?tag=edmonddante07-20

**Tags:** central-bank-independence, central-banking, regulatory-state, democratic-legitimacy, lender-of-last-resort

### 2. The New Lombard Street: How the Fed Became the Dealer of Last Resort

**Author:** Perry Mehrling

Mehrling updates Bagehot for modern market-based finance. He traces how the Fed moved from lender of last resort to 'dealer of last resort' in 2008, using money-market balance sheets and a history of Fed thinking since 1913.

**Difficulty:** Advanced | **Language:** English | **Price:** Paid

**Link:** https://www.amazon.com/dp/0691242208?tag=edmonddante07-20

**Tags:** federal-reserve, lender-of-last-resort, money-markets, financial-crises, central-banking

### 3. Lombard Street: A Description of the Money Market

**Author:** Walter Bagehot

Bagehot's 1873 account of the London money market and the Bank of England. It is the source of the classic lender-of-last-resort rule: in a panic, lend freely, against good collateral, at a high rate. Free as a public-domain ebook.

**Difficulty:** Intermediate | **Language:** English | **Price:** Free

**Link:** https://www.gutenberg.org/ebooks/4359

**Tags:** lender-of-last-resort, bank-of-england, money-markets, financial-panics, monetary-history

## Youtubes

### 1. Economics of Money and Banking (Perry Mehrling, full lecture course)

**Author:** Perry Mehrling

Mehrling's Columbia/Barnard course, filmed in full. It teaches the 'money view': the central bank as clearinghouse, fed funds, repo, eurodollars, the dealer of last resort, and the 2007–09 crisis, all worked through balance sheets. Over 100 video segments, free.

**Difficulty:** Intermediate | **Language:** English | **Price:** Free

**Link:** https://www.youtube.com/playlist?list=PLSuwqsAnJMtwZEwkJgHZCod2xP9b7skF5

**Tags:** money-view, monetary-economics, repo-markets, dealer-of-last-resort, financial-crisis-2008

## Websites

### 1. The Fed Explained: What the Central Bank Does

**Author:** Board of Governors of the Federal Reserve System

The Federal Reserve's own guide to its structure and its five functions: monetary policy, financial stability, supervision of banks, payment and settlement systems, and consumer protection. This is the 11th edition (2026), free as a full PDF or by chapter.

**Difficulty:** Beginner | **Language:** English | **Price:** Free

**Link:** https://www.federalreserve.gov/aboutthefed/the-fed-explained.htm

**Tags:** federal-reserve, monetary-policy, bank-supervision, payment-systems, financial-stability

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