Silvio Gesell and the Wörgl Experiment

        In the last decade of the 19th century, a hitherto unheard-of German immigrant in Argentina published a book proposing a radical new monetary system. The author, Silvio Gesell, had no training in economics and so his ideas could very easily have been dismissed, but they were not. They caught the attention of economists, governments, and

Old Genoa’s Universal Bank

           What banking and public finance have in common might not be obvious. However, in their histories, the two are joined at the hip. Indeed, some of the oldest banks have their origins in public finance. Counterintuitively, this includes central banks with roots as private organizations. The Bank of England, for example, was founded as little

Britain’s Sinking Fund

           In the late-18th century, Britain was awash in debt. So large was this debt that even relatively cheap financing couldn’t save the British government from interest costs that ate up half of state revenues. To pay down this debt, the country implemented a sinking fund, a fund established to repurchase bonds that had previously been

Venice’s Fiscal Restructurings

           Financial innovations are frequently born of necessity and this is true in public finance just as much as in corporate finance, banking, and beyond. It is often when the public finances are in the most dire shape that creative thinking is most needed. Sometimes, the solutions conjured up set governments on the right course. Though

Victorian Banking, Through the Ledger

           The value banks add to industry is well known, the value of banking to commerce is no less uncertain. By contrast, it can be easier to lose sight of the value banks provide to ordinary people, especially in a historical setting. Indeed, for the first couple centuries of modern banking, common folk hardly interacted with

The Disaster that Made Reinsurance

           Favorable laws and institutions along with innovative practices helped put Britain at the forefront of the world insurance business for centuries. However, when it came to reinsurance, the British were sitting on the sidelines while the industry was thriving in Germany. As with many other historic changes in insurance, the birth of reinsurance resulted from

John Law, the Outlaw Banker

           At the start of the 18th century, a stock market boom was underway in several European countries simultaneously. Today, this episode is best remembered for the spectacular boom and bust of the South Sea Company in Britain. However, it was just one of the companies involved in a larger mania. In France, a bubble in

Commercial Paper Crisis of 1763

           For as long as money can be borrowed short-term at a rate cheaper than it can be borrowed for longer, banks and borrowers will be incentivized to keep the duration of their liabilities short. While this is economically favorable in the short-run, it carries meaningful risks. Such a maturity mismatch has been the source of

England’s 15th Century Depression

           In the mid-15th century, the economy of late-medieval England took a turn for the worse. The result was decades of economic stagnation and a reversal of a paradigm that dated to the end of the Great Plague of the 1340s. To speak of economic recessions or depressions in a pre-modern period, especially those whose root

The Soviet Union’s Global Bank

           Despite the confrontation between the West and East during the Cold War, there was plenty of peaceful economic interaction between the two sides. During the roughly 75-year existence of the Soviet Union, it interacted across numerous different fronts with the capitalist world. One of the most notable of these channels was trade. Many banks financed