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

WWI’s Emergency Money

           Back when the value of currencies was still linked to the precious metals, and their issuance therefore curtailed, many resented the scarcity of money as the cause of their economic ills. Of course, a deficiency of money makes credit similarly scarce and can slow economic growth even when any stimulus at all would be welcomed.

Paying the Hoplites

           Many industrial and technological advances owe their existence to war and the same is true for financial innovation. In late-17th century England, a financial revolution was triggered in part due to a large European war then underway. The need to fund wars sparked financial ingenuity in more ancient times too. The city-states of classical Greece

Tulip Mania

           In the 17th century, one of the first recorded speculative bubbles held Holland firmly in its grip and it involved one of the most unlikely of assets, not stocks or bonds or real estate, but tulip bulbs. Even more than the time and place, it is the asset involved that makes the tale of ‘tulip

The Baltic, Britain’s Sociable Exchange

           In the world’s oldest market economies, securities and commodities exchanges have been in operation for centuries. Of those founded in Britain and America, quite a few have their origins in coffee-houses. In an era when Puritan sensibilities made alehouses and taverns unseemly places to do business, coffee-houses provided a place for social diversion. However, this

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