This chapter deals with banks as creators and stores of money. We first offer an overview of the economic theories developed in the 1960s and 1970s, where the role of banks depended on their function of transmitting monetary policy of the central bank to the rest of the economic system. We then discuss more modern interpretations that explain the role of banks based on their ability to resolve the informational asymmetry between investors (borrowers) and savers (lenders). Financial innovation raises the question of whether banks may disappear, replaced by financial markets and digital credit management techniques, including artificial intelligence, that minimize the need for human intervention. The experience of financial crises has given new life to reform proposals where banks would be split into a depositary institution providing payment services and an investment arm providing long-term credit and financing itself at long maturities. A related proposal, also aiming at reducing the risk of crises, would subject depository institutions to a 100 percent reserve constraint (the so-called Chicago proposal). At the end of the chapter, reasons are given as to why these proposals should be discarded because they would neither reduce the risk of crises nor give rise to a more efficient intermediation system.

This penultimate chapter introduces two complete editions of the Lives. The first was published in 2006 by Oxford University Press and the second in 2010 by Yale. The value of these editions is the attention they bring to the textual details of Johnson’s critical writing; they promote accuracy in dealing with his terminology. Evaluating Johnson’s criteria depends on such detail. The editions invite us to look more closely at the implicit meanings within the overall structure. They are of course very different and suggest different editorial cultures. The Oxford is very ample in its commentary; the Yale annotation is leaner and conforms in editorial style to the Works to which it belongs. Different users will find merits in both approaches, and a final preference is difficult to determine given the different ways in which Johnson’s critical and biographical writings are read or used. But both editions, in their ambition and magnitude, suggest the persistent presence of Johnson’s critical writing and are crucial to its reception.