From Sea Loans to Lloyd’s

           Not all financial products attempt to turn a sum of money today into a larger one tomorrow. Even retail banking grew more out of a desire to protect what one had rather than to acquire more. However, the need for protection features more prominently in the story of insurance than of almost any other financial

Eastern Bloc Hard Currency Shops

           During their last two decades under socialism, the economies of Eastern Europe struggled with current account deficits and limited access to credit with which to finance them. In most of these countries, this spawned efforts to acquire foreign ‘hard’ currency whenever it entered their borders, undertakings that involved a lot of creative thinking and government

The 19th Century Eurozone

           In 1992, the Maastricht Treaty committed the European Union to adopting a single currency, the euro. The most immediate precursor to the euro in existence then was the Exchange Rate Mechanism (ERM) which pegged several European currencies to each other, creating a system of fixed exchange rates. The ERM was established in 1979 and disintegrated

Albania’s Pyramid Scheme Nightmare

           For many ex-socialist states, the rapid transition to a free-market economy was a calamity. In contrast to slower and more successful transformations, like that of China, the nations of Eastern Europe inaugurated their market economies with deep depressions and high inflation. Some of the blame for the disastrous ‘shock therapy’ that characterized the transformation of

European Coal and Steel Community

            Whatever its evolution beyond a mere free trade zone, the European Union is nonetheless the product of decades of trade liberalization, today uniting 500 million people in a common market. The trade liberalization seen in 19th century Europe, though it sharply reduced barriers to trade, did not go nearly as far. While the EU is

Cobden-Chevalier Treaty

           As the Industrial Revolution spread throughout Europe and beyond in the 19th century, so did new approaches to economic thinking. Protectionism was slowly but steadily going out of vogue, and free trade, or at least liberalized trade, was making headway. In Britain, the repeal of the Corn Laws in the 1840s was a major turning

Corn Laws and Free Trade

            Free trade is often associated with late-20th century globalization. The creation of large continental trade associations like NAFTA, Mercosur, and the EU lead many to consider trade liberalization to be a recent phenomenon. The truth is that free trade, and the economic rationale behind it, had its birth in the 19th century with the decline

Orphaned Soviet Bonds

            The ability of financial markets in a free-market system to raise capital is virtually unrivaled. So much so that even communist governments have turned to them for loans. The Soviet Union was no stranger to the sovereign debt markets and the Soviet state raised money by selling bonds in Western financial capitals during the last

The Medici Bank and Letters of Credit

           The 17th and 18th centuries saw financial innovations whose creations have direct heirs today, from the modern deposit bank to the joint-stock company. However, it would be incorrect to imply that these institutions were the first of their kind. When it comes to banking for example, older Renaissance-era institutions made substantial breakthroughs and while that

The 370-Year-Old Infrastructure Bond

           There aren’t very many financial instruments, especially bonds, that distributed income to investors for over a century. The relatively few that exist are usually perpetual bonds, those without any maturity date at all. Today, they are a relatively small category of bonds available to investors. However, there was a time when perpetual bonds were the