Bagehot for "followers": how did the Bank of Portugal manage the first post World War I crisis?

The lender of last resort (LLR) function is a form of micro-management employed by central banks, usually in cooperation with or under the direction of governments, either to mitigate banking panics, or to prevent them from occurring. This paper considers the employment of the LLR function in Portugal during the early post World War I years. It is based on primary material in the Bank of Portugal's archive. Using a detailed account of the first banking crisis of the early 1920s, this study shows that the Bank of Portugal did not conform to Bagehot’s archetype and explains why the departure from this model was unavoidable. It concludes that a lack of awareness of his paradigm was not the reason for the policy option of the Bank of Portugal.