Starting at the end of the 17th century, there was a wave of financial innovation in England. It isn’t often discussed what happened farther north, in Scotland. Scotland too saw a financial revolution, though it was hampered by the relatively small size of Scotland and some crises along the way. Some of these affected England…
In 1850, Japan was an economy intentionally closed off from foreign trade. Even Japanese merchants and bankers were not well regarded in the country, let along foreign ones. By 1900, Japan had come a long way industrially and financially, possessing a developed banking system and large industrial firms. Shibusawa Eiichi was responsible for much of…
When cities not previously known as banking and financier centers become such, they usually adopt something from the incumbent financial centers of the era. New banking cities mimic the old and often import talent from them. In the 14th century, Bruges became the first banking center in the north of Europe to match the scale…
It is easy to overestimate the role finance had in setting off the Industrial Revolution. To some extent, the early stages of the Industrial Revolution took place in spite of the financial system rather than because of it. Industrial enterprises in the first half of the 19th century had little access to the capital markets…
The general role of banks in free market economies is no mystery. However, listing what a banking contributes to a state-led economy, or even a wholly state-run economy, could require more thought. Thankfully, the early history of the Soviet Union reveals that banks had something to offer even in a system where the state budget…
Bank failures were commonplace in 19th century America but it would be wrong to presume no concerted effort was made to cure this epidemic. State governments grappled with the challenge of creating an environment conducive to bank formation and yet protected customers and others from the effects of a bank’s collapse. New York’s solution was…
London was the premier financial center in the world in the 19th and early 20th century. This status seemed lost for sure when New York and Tokyo gained share at different points of the 20th century. Indeed, forty or fifty years ago, the prospect of London regaining its past preeminence seemed a remote possibility, if…
Over the course of the 19th century, banking services were extended to rural parts of America. This trend continued into the next century. Compared to urban banks, those in small towns in rural parts of the country had exposure only to a narrower array of economic activities requiring their services, these regions being mostly agrarian.…
Credit is important for nearly all businesses. Even for companies without a need to finance large projects, like small businesses in capital-light sectors like retail, capital is still tied up in inventories and receivables. Banks can be one source of credit but banks are often disinterested in serving small businesses, as was the case in…
One of the most famous American bankers in history, John Pierpont Morgan, got his start not in New York but in London. There, his father was a partner in a firm founded by another American abroad, George Peabody. Peabody was born poor and received very little education; after finding success in business in America, he…
In 1660, the English parliament invited the exiled royal family to return. Charles II was allowed to rule, ending over a decade of republican administration that began with Parliament’s victory in the English Civil War. The restored king Charles II was, like Charles I, strapped for cash. Temporary relief would periodically come from the considerable…
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…
