Last week, I was re-reading Gayer, Rostow and Schwartz's The Growth and Fluctuation of the British Economy 1790-1850. Just after I had finished, I heard the sad news that Anna Jacobson Schwartz had passed away aged 96. Schwartz worked daily in her NBER office up until very recently and was highly critical of the the Fed's actions and expansion during the financial crisis. I had the privilege of meeting Anna Schwartz in the mid-1990s - she was a gracious scholar who was very keen to talk to a young PhD student from Queen's University. I was amazed by her intellectual sharpness and her humility - the two things all great scholars should possess. You can read obits here and here.
As an undergraduate, I was taught about the failure of Herstatt Bank in 1974 and Herstatt risk. This bank was only the 35th largest bank in Germany at the time so why would anyone be interested in studying its failure? Herstatt failed because of its involvement in risky foreign exchange business. When it closed its doors on 26 June 1974, counterparty banks (mainly in New York) had not received dollars due to them because of time-zone differences - this is known as settlement risk. The cross-jurisdictional implications of its failure resulted in the Bank for International Settlements setting up the Basel Committee on Banking Supervision and Herstatt's failure was a key reason for the establishment of real-time gross settlements systems, which ensures that payments between two banks are executed in real time. The Bank of England's Ben Norman has an interesting post on Herstatt over at the Bank's new blog ( Bank Underground ). As well as giving an excellent overview of