Continental Illinois, Gary Gorton, lender of last resort, Too Big To Fail, Walter Bagehot

According to Gary Gorton and Ellis W. Tallman, in their  recently released NBER Working Paper, some were. For several decades prior to the Fed's establishment, Gorton and Tallman note, "private bank clearinghouses provided lending facilities and assisted member banks when they needed help."  The pattern of such assistance, they say,…