The 18th century was a formative one in finance, especially in Britain. The innovations of the ‘Financial Revolution’ and the accompanying respect for the importance of sound credit had resulted in an increasing ‘financialization’ of the economy. Though still scarce, credit was becoming more accessible, most of all for the increasingly indebted British state. When…
The French Revolution was the culmination of a century of financial mismanagement. The political disorders only brought about further economic trouble though, and monetary mayhem as well. However, the Revolution did create opportunities in French finance as it eliminated barriers to the establishment of new banking firms. One of those formed in the wake of…
Lloyd’s of London, one of the oldest continuously operating financial institutions around, faced profound troubles just thirty years ago, financial challenges that threatened to discredit or destroy it. The eyes of its regulators, customers, and thousands of member underwriters were on Lloyd’s. In recent years, banking firms in distress have created ‘bad banks’ to separate…
Establishing a corporation used to be a rare feat, not as simple as filing a form. Indeed, incorporation and the legal benefits it provided to financial and non-financial firms were closely guarded rights, the product of charters rarely conferred. So, if a corporation’s business model was on the way out and its value dwindling; it…
In its first century in operation, the Bank of England carried out a wide array of functions, many of which it had a legal or practical monopoly over. One of these was ensuring its banknotes, the most common in the country, were adequately backed by reserves, the most important of which was gold. However, in…
Fiat currencies supposedly receive their value from the dictates of the issuing government. Citizens must pay their taxes in official currency and even the acceptance of a certain money in private transactions may be mandated by the state. Accordingly, the exact value of fiat currencies is usually linked to the health of the issuer. If…
According to the most common accounts, the first stock exchange was established in Amsterdam following the initial public offering of the Dutch East India Company in 1602. However, Amsterdam was not the first city to earn the distinction of being a financial center. It was, after all, hardly the first time traders gathered in a…
Colonial America was not awash in corporate entities of any kind; no country was. However, one of the oldest corporations in America, one even older than the Unites States itself, was also among the first life insurance firms in the world. The establishment of the Presbyterian Ministers’ Fund is a significant event in the history…
In 1982, the third largest stock market in the world crashed, losing 60% of its value over three months. This occurred not in America or Japan, but in Kuwait. The tiny Persian Gulf state of a million and a half people had become enriched by oil money which flooded into its financial sector from investors…
Banking as we know it today was hardly in existence before the 17th century. However, there was something of a financial revolution in late medieval Italy and it saw a new type of firm offer financial services, and indeed banking services, taking deposits and lending money, even across national borders. These firms were principally interested…
