Around 1970, a Switzerland-based asset management firm, Investors Overseas Services, had grown into one of the largest in the world in the span of just a few years, this despite a small initial target market of American soldiers deployed in Europe. Of course, the company had grown far beyond this limited market in the years…
What do matches and money have in common? Not much perhaps, except that one man seemed an especially powerful supplier of each. Ivar Kreuger is possibly the person whose fame has diminished the most in the last century of financial history. During the 1920s, he was one of the largest creditors, and borrowers, in the…
Globalization in finance has allowed the emergence of global banks, able to participate with ease in different markets around the world as barriers to the international flow of capital have been dismantled. However, global banks are not as easily regulated as those constrained to a single country, especially when closer international cooperation amongst regulatory and…
In 2006, authorities shut down the operations of two stamp dealing firms in Spain offering investment products that turned out to be fraudulent. The value of the products they sold to customers were overstated and the returns they offered could only be paid out of the investments made by new investors. This ponzi scheme was…
When the investor Warren Buffett finds a worthwhile investment, he rarely lacks commitment. Many of his holdings, either in the days of his old investment partnership or at his firm Berkshire Hathaway, are large relative to the total portfolio’s size. At odds with others’ guiding rules, Buffett has often eschewed diversification, at least when he…
Britain’s ‘Financial Revolution’ is usually best known for its fiscal and market effects. However, it also coincided with changing opinions towards consumer credit. By the early 18th century, borrowing and lending was accepted as a fact of life that was best tolerated rather than regulated out of existence. One attempt at improving the terms upon…
In 1995, the French government chose to rescue a bank at a cost of $35 billion which had secretly and illegally acquired another firm earlier that decade without regulators noticing. The bank falsified financial statements and had been drifting towards riskier activities for years. Making this story even more surprising was that all this illegal…
Two centuries ago, an entrepreneurial Scot used his imagination to mint great profits, only unlike the inventors and industrialists who characterized that era, he was a con man. Gregor MacGregor was an adventurer chasing money and fame and he separated many from their hard-earned money with tales of riches in a faraway place called Poyais.…
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…
