Merchants are regularly presented with dangers that are distinct from ordinary and obvious market dangers such as the movement of prices up and down. Besides these, they also face all sorts of risks arising from the people they must trust in order to conduct business, namely counterparty risks. Today, and for centuries, industries rely…
The first large banks to be founded in a particular country tended to do a bit of everything. They took deposits, made loans, issued banknotes, distributed securities, and more. These functions may have been fulfilled previously by unique actors but large banking firms brought them under one roof and usually on a larger scale.…
Fiat currencies supposedly receive their value from the dictates of the issuing government. Citizens must pay their taxes in official currency and even the acceptance of a certain money in private transactions may be mandated by the state. Accordingly, the exact value of fiat currencies is usually linked to the health of the issuer. If…
The extraction of commodities can be the fuel for financial booms and busts. Whether it be cotton in 19th century Egypt or oil in 20th century Venezuela, commodities have enriched people, firms, and nations, often temporarily. Perhaps some of the most historically memorable commodity booms were the gold rushes of the 19th century, which snapped…
In the 19th century, control over Egypt fell into the hands of rulers bearing grand ambitions for their country. However, ambitions are expensive and debts mounted as money was poured into new infrastructure projects, most notably the Suez Canal. Egypt was first introduced to the international debt markets while its economy boomed amidst rising prices…
