with the banks still fearful about making new loans because of the rising risk of default by overseas borrowers. in response, the government announced an extension to the scheme, with the government effectively insuring the banks against the credit risk on these assets too. it worked. within a couple of months, money market conditions had stabilised and credit was once more flowing. cunliffe ’ s cold storage plan had averted a credit crisis. the cold storage scheme was a piece of clever financial engineering by the bank, designed to support credit and the wider economy. in the past few years, with credit growth and the economy weak, the bank has been in the vanguard of creating new pieces of machinery to serve a similar end. in 2008, the bank introduced a special liquidity scheme, or sls, to help finance uk banks ’ legacy asset portfolio. over £180 billion of support was provided to the banks and has since been repaid. 6 the sls bears more than a passing resemblance to the first phase of the cold storage scheme. in june this year, the bank announced a second scheme, the funding for lending scheme, or fls. it provides liquidity support to uk banks on terms which depend on their lending to the uk economy, thereby acting as a direct incentive to stimulate new lending. the fls bears some resemblance to the second phase of cold storage. the sls and fls may be less famous than jls, the london r & b boy - band. but they are an important recognition of the bank ’ s role in supporting credit intermediation. that role began in the early part of the 20th century with schemes like cold storage. the bank ’ s role had expanded beyond its own doorstep, on which the banks stood, to the doorsteps of households and companies up and down the country seeking credit. supporting financial infrastructure yet one thing at least had stayed the same : in 1914, the bank had only acted when jolted into doing so by war. its role was still as crisis - container rather than preventer. during the 1920s and 1930s, the bank of england became montagu norman ’ s bank. and norman set about changing that. norman was not cunliffe ’ s greatest fan and the feeling was clearly mutual. “ there goes that queer - looking fish with the ginger beard again ”, cunliffe is said to have observed about norman. “ do you know who he is? i keep seeing him creep about this place like a lost soul

##ti, g and moessner r ( 2011 ), “ macroprudential policy – a literature review ”, bis working papers no 337. geddes, p ( 1987 ), “ inside the bank of england ”, boxtree ltd. goodhart, c a e and crockett, a d ( 1970 ), “ the importance of money ”, bank of england quarterly bulletin, june, pp 159 – 98. hennessy, e ( 1992 ), “ a domestic history of the bank of england, 1930 – 1960 ”, cambridge university press. john, s, roberts, m and weeken, o ( 2012 ) “ the bank of england ’ s special liquidity scheme ”, bank of england quarterly bulletin, march, pp 57 – 66.. kynaston, d ( 1994 ), “ the city of london vol. i – a world of its own, 1844 – 66 ”, london. kynaston, d ( 1994 ), “ the city of london vol. ii – golden years, 1890 – 1914 ”, london. leigh - pemberton, r. ( 1989 ), speech given at the ernest sykes memorial, 24 may 1989 available from bank of england archive, ref. 7a320 / 10. mahate, a a ( 1994 ), “ contagion effects of three late nineteenth century british bank failures ”, business and economic history available at http : / / www. thebhc. org / publications / behprint / v023n1 / p0102 - p0115. pdf norman, b, shaw, r and speight, g ( 2001 ), “ the history of interbank settlement arrangements : exploring central banks ’ role in the payment system ”, bank of england working paper no. 412. orbell, j ( 1985 ), “ baring brothers & co., limited. a history to 1939 ”, butler & tanner ltd. roberts, r and kynaston, d ( 1995 ), “ the bank of england : money, power and influence 1694 – 1994 ”, oxford, clarendon press. roberts, r, reading, b and skene, l ( 2009 ), “ sovereign rescues : how the forgotten financial crisis of 1914 compares with 2008 – 2009 ”, lombard street research, special report. saw, r ( 1944 ), “ the bank of england, 1694 – 1944 ”, george g harrap & co ltd.