The First Sovereign Bonds

           The borrowing needs of governments usually exceed what any one creditor is able to lend. For centuries, governments have worked around this by selling bonds with standardized terms to investors, millions of them. However common this practice is today, it was absent in most ancient and medieval civilizations. It was not until the Late Middle

London’s Goldsmith-Bankers

           Banks are rather curious institutions. While we may not recognize it today, the idea that your money is safer in the hands of a stranger is a tough sell. If a random person came up to you on the street and offered a quarter percent more interest for your savings, claiming his vault was more

Postal Savings Systems

           Like almost everything else, access to banking services is often unappreciated by those who have it. Yet, it is so important to economic development and improving the standard of living of ordinary people that it is often a key policy focus of developing countries, and not just their governments. From microfinance to fintech, new approaches

The Knickerbocker Trust Company

           Financial crises have been around longer than many realize. Imagine reading that the stock market plunges by 50%, recession follows, investment firms and banks fail across the country, and the government seeks to get to the bottom of what happened. Could that be describing the Great Depression or the most recent recession? In either case,

Exchange Alley

           Long before New York became a financial capital of North America, let alone the world, London already had the institutions befitting a city of finance and commerce. The Royal Exchange had been founded by merchant and advisor to the monarch, Sir Thomas Gresham in 1571. Lloyd’s of London would be founded in a coffeehouse a

Pricing in Eighths

           Up until the year 2000, stock exchanges in the US quoted share prices in eighths. That meant the smallest increment that a stock could move was one-eighth of a dollar, nothing less. In the normal course of a trading day, one share of FedEx would trade hands at $14.125 or $14.25 but nothing in between.

The Bank of England’s Weathervane

           For better or worse, forecasting has become part of economists’ repertoires. But, given the delays involved in collecting and summarizing data into regular reports on the economy’s health, using more frequently compiled or even real-time data is an art in itself. Trying to make sense of the overall economy by looking at minute-by-minute movements in

How Stamps Funded a War

           Ever since late medieval Italian city-states sold bonds to finance wars, the availability of debt financing has been crucial to the war-fighting ability of almost every country. However, not until the 20th century did their financing become a public affair. War Bonds played a significant role in civilian participation in the war effort during both

The Tontine Coffee-House

           Those who know a bit about New York’s financial past have almost certainly heard of the Buttonwood Agreement. In 1792, two dozen stockbrokers signed a now famous pact agreeing to trade directly with each other, bypassing any middlemen, under a Buttonwood tree on Wall Street. This agreement standardized trading between them and is thus thought