Historians of economic thought have generally described Walter Bagehot as a scarcely original economist. This is tied to his refusal to adopt normative reasoning, which was deeply rooted in his evolutionary approach. This paper focuses on Bagehot’s opinions about the interactions between monetary and fiscal policy, which allows putting his thought in perspective beyond the narrow question of lending of last resort. We reconstruct his innovative views on the liquidity of short-term government securities, which cannot be found in his predecessors. Bagehot’s views were highly influential, as they led to the modernisation of government borrowing in the UK through the creation of the modern Treasury bill.