Maylis Avaro, Vincent Bignon, 20 July 2019

The payment landscape is changing. This column goes back to late 19th century France to explore the implications of this more decentralised and less banked landscape for the design of central banks’ interventions when fighting financial crises. The Banque de France operated a very wide discount window and used a variety of risk management techniques to effectively subdue risk-taking behaviours and to protect its balance sheet from taking any loss. This helped it to stabilise the economy and to overcome the consequences of negative income shocks.

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