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CEP Public Events

Lionel Robbins Memorial Lectures

Lionel Robbins Memorial Lectures 2019 - Liquidity and leverage: Why banks?

Raghuram Rajan (The University of Chicago Booth School of Business)

Monday 11 March 2019 18:30 - 20:00

Old Theatre, Ground Floor, Old Building, LSE, Houghton Street, London WC2A 2AE

About this event

Lionel Robbins was one of the outstanding men of his time; economist, public servant and supporter of the arts. The lectures, which were established in his name, take place each year and are a major event in the life of the School, featuring eminent economists from around the world.

Listen to a recording of the event:

This year Raghuram Rajan, the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth will deliver the Lionel Robbins Lectures. 

Raghuram Rajan was the 23rd Governor of the Reserve Bank of India between September 2013 and September 2016. Between 2003 and 2006, Prof Rajan was the Chief Economist and Director of Research at the International Monetary Fund.

Lionel Robbins Memorial Lectures 2019, Liquidity and leverage

A bank's issuance of short-term demandable or overnight claims in order to finance illiquid loans leads to panic. Since the dawn of banking in Assyria and Sumeria, long before we had central banks, deposit insurance, or a tax advantage to debt, banks have had this structure, and critics have been troubled by it, as they are today. Professor Rajan will argue that this structure of banks - financing illiquid loans with short-term or demandable debt - is not just a bug in the system, it is also a feature.

Lecture 1 - Why banks? 
The first lecture will focus on why banks have the structure they have - long-term illiquid assets financed by short-term runnable liabilities. It will explain why the risk of runs is inherent in the business of banking and cannot be eliminated without impinging on that business.

More details for the first lecture in this year's series are available here.

Lecture 2 - The two faces of liquidity 

The second, and last, of this year's two Lionel Robbins lectures, this talk will focus on why anticipation of high liquidity can be detrimental to the financial system, increasing leverage, the system's dependence on liquidity materializing, and lowering good governance practices.

For more information on this event, visit

Participants are expected to adhere to the CEP Events Code of Conduct.


This event will take place in Old Theatre, Ground Floor, Old Building, LSE, Houghton Street, London WC2A 2AE.

The building is labelled OLD on the LSE campus map. You can also find us on Google Maps. For further information, go to contact us.