As communist countries transitioned to capitalism, numerous existing institutions lost their relevance and countries found themselves short of the institutions crucial to developing successful capitalist economies. One of these were banking institutions. Banks are important to raising and intermediating the money required by new and existing industries alike. Poland had some banks before 1989…
For decades before the First World War, the values of currencies were broadly stable. Fixed exchange rates against gold and convincing commitments by governments to maintaining the gold standard made this so. The war caused almost all countries to suspend their gold standards and many governments printed far more money and borrowed a lot…
Just before the ‘second industrial revolution’ created new industries and their accompanying fortunes in areas like electricity, steel, oil, and telephones, new investment in the United States was concentrated in railways. Railroad projects attracted huge amounts of private and public resources. It also attracted speculators and their machinations as well as the unscrupulous business…
Eras of rapid change are much more likely to give rise to financial bubbles than stagnant periods. The former are far more prone to excessive enthusiasm, the expansion of credit, and the accumulation and mis-investment of surpluses than the latter. In the 1860s, the American Civil War abruptly cut off one of the world’s…
The history of firms like Rothschild, Barings, J.P. Morgan, and others are often interchangeable with the biographies of their founders, managing partners, and other chief executives. The work of the humble bank clerk often goes unnoticed. Yet, the growth of banking in the 19th century could not have been achieved without them, and without…
The pace of bank failures in the United States picked up in the 1980s and one of the largest of these came in 1984, when Continental Illinois had to be rescued. The bank was a Chicago lender that was growing rapidly starting from the late-1970s. Yet, this growth was driven by loans to clients…
The oil crises of the 1970s were events that reordered the global economy. Energy consuming economies, like those of the European countries after Les Trente Glorieuses (the ‘Thirty Glorious Years’), saw their strong growth suddenly grind to a halt. At the same time, energy producing regions received a windfall. The U.S. economy was a…
The First World War tested the fiscal systems of all belligerent countries, usually in unprecedented ways. Governments had to tax more than they ever had before, they had to borrow more than they ever had before, and had to restrict their economies, including with respect to trade and foreign exchange, in ways they never…
There have been numerous instances in history where several different currencies circulated in the same place simultaneously. Forms of this come up in several settings. One is the variation where there is no clear money-issuing institution. The result is often the importation of foreign monies. Another variation is where there are numerous money-issuing entities,…
Some of the most anticipated initial public offerings are for those companies already at the top of their industries but which have remained privately-held for a long time. Some large companies are held privately for more than a single generation. When they announce a public offering, it piques the interest of more investors than…
