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…
Just a few months after the American War of Independence finally came to a formal conclusion with the Treaty of Paris in 1783, a bank was founded that would live to today. The Bank of New York had humble origins, founded with under $500,000 in equity capital. However, it had an illustrious backer and a…
The history of banking is full of triumphs and tragedies alike. Individual firms and entire business models have risen to dizzying heights before crashing down in disrepute. In each disaster is a lesson more lasting than the success or failure of any individual firm or financier. Although perhaps not the most studied financial market, and…
When it came to most arts and sciences, the state of Medieval European civilization left a lot to be desired. However, behind the shroud of brutishness and simplicity, it was a society steadily developing financial complexity. It was a unique development as well. The continent’s organization into numerous small states, in contrast to the Caliphates…
In the 16th century, European finance was dominated by a banking family whose wealth was far greater than their amusing name would let on. From their adopted home of Augsburg in Bavaria, they were creditors to emperors. These were not just any emperors too, but the Habsburgs, a dynasty that ruled much of Central Europe,…
Securitizations are often regarded as innovations of modern finance, products of the last three decades and not the last three centuries. In fact, pooling financial assets together and selling tradable instruments backed by that pool is not so novel a practice as one might think. Over two centuries ago, bankers were pooling life annuities, contracts…
The goldsmiths of 17th century London are among those who can be said to have invented modern banking. Though goldsmiths by trade, they played the part of bankers too, taking in deposits and loaning them out at interest to the public. Nonetheless, banks remained rare in Britain before 1750. That was soon to change however,…
When it comes to financing real estate purchases, mortgages have been around for centuries. The first loans called mortgages developed in the middle ages; the word itself comes from Norman law books as “mort gage” or “dead pledge.” The word dead here refers not to any human death but to the fact that medieval mortgages…
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…
Much as it was for the country as a whole, the middle of the 19th century was a formative era for American finance. The Era of Free Banking was a period of very little regulation of banks and saw the founding of many of them. But two of today’s most massive American financial firms, Wells…
Banks are rather curious institutions. While we may not recognize it today, the idea that your money is safer in the hands of a stranger is a tough sell. If a random person came up to you on the street and offered a quarter percent more interest for your savings, claiming his vault was more…
Like almost everything else, access to banking services is often unappreciated by those who have it. Yet, it is so important to economic development and improving the standard of living of ordinary people that it is often a key policy focus of developing countries, and not just their governments. From microfinance to fintech, new approaches…
