Boom and bust cycles in securities markets are very familiar and usually ridiculed in retrospect. It is easier to blame the victims of speculative episodes in ‘paper assets’ like stocks and bonds than those ensnared in contracting markets for ‘real property’ like real estate. Crises in real estate markets trouble the minds of observers far…
In the early 19th century, several new countries were born in Latin America. Many of these began to borrow in their own name from the capital markets, especially in London, and many found themselves bankrupt. Brazil was among the first group but not among the second, avoiding a fate that plagued much of the continent…
Medieval Italy was home to a burgeoning banking system, even a century before the start of the Medici banking operation. This system was concentrated in the Tuscan cities of Siena, Lucca, and Florence but its reach was international. Tuscan bankers financed merchants conducting international trade before extending their services to kings and popes. These relationships…
After France’s defeat in the 1871 Franco-Prussian War, the country was billed five billion francs for peace. This ‘indemnity’ was intended to cripple the country, but it failed. The French government was able to pay the demanded reparations faster than expected by refinancing the indemnity with perpetual bonds, or rentes. It succeeded in conducting the…
