Paul Krugman: Money: The Brave New Uncertainty of Mervyn King

The Bank of England, founded in 1694, isn’t the oldest central bank in the world, an honor that belongs to Sweden’s Riksbank, founded a quarter-century earlier. But the “Old Lady of Threadneedle Street” arguably invented the art of central banking—the visible hand, operating through the money supply, lending policies, and more—that all modern economies, no matter how much they may talk about free markets, rely on to provide monetary and financial stability.

These days, of course, the pound sterling is much less widely used than the dollar, the euro, or even the yen or the yuan, and the Bank of England is correspondingly overshadowed in many ways by its much younger counterparts abroad. Yet the bank still punches above its weight in troubled times. In part that’s because London remains a great financial center. But it’s also thanks to the Bank of England’s intellectual adventurousness.