Merchant Sailors

           Long sea voyages were among the largest privately undertaken ventures in the early modern world. Financing them led to the creation of some of the first joint stock companies and the task of insuring them made marine insurance one of the first modern insurance products available. Yet the sailors involved are easily overlooked, but they

The World Bank’s Pandemic Bonds

           Insurance works courtesy of the law of large numbers. Every year, some number of homes burn down and some proportion of cars crash and these events may be unpredictable to any one insured person. To an insurer though, the occurrence of such mishaps across their portfolios is actually quite predictable. However, insurers also have a

Cornelius Vander Starr

           Governments had to come to the rescue of many firms during the 2007-09 financial crisis and one of the largest rescues was that of American International Group (AIG). Unlike most of the other firms teetering on the brink, AIG was an insurance company and not a bank. It was also a particularly international firm; not

Crédit Lyonnais and Executive Life

           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

Argentina, Barings, and the Panic of 1890

           In search of higher returns elsewhere, European investors in the 19th century increasingly coveted the bonds of South American borrowers. In Argentina, foreign money helped finance national improvements and government deficits. Arranging much of this financing was one of the oldest London merchant banks, Barings Brothers & Co. When the boom years ended and the

The Nabobs’ Homecoming

           In early modern Europe, the most powerful incentive for overseas exploration were the riches to be gained by trade. These riches led countries to sponsor trading companies and sent the entrepreneurial abroad. In the case of British merchants, clerks, and soldiers in India, there were opportunities to earn fortunes nearly unachievable at home. British trade

Father of Venture Capital

           Venture capital is probably regarded as a relatively modern asset class, spurred by the billions of dollars raised for private investments in already valuable firms and the valuations conferred on growing firms in initial public offerings. However, venture capital investing, even early-stage venture investing, has been around since as long as risky new projects have

Experiments in Military Currency

           Technical advances brought about changes in military planning during the Second World War, but measuring the impact of new technologies and tactics was not the only preoccupation of the planners. Even monetary questions had to be confronted. During the war, armies had to be supplied with locally sourced materials wherever they were. This need, along

Confessions of a Stockjobber

           Published almost a hundred years ago now, Reminiscences of a Stock Operator by Edwin Lefèvre is more than an investment book. It is something of a novel, set in fin de siècle New York and revolving around a certain stock trader named Larry Livingston. This Larry Livingston did not exist, at least by that name,

The Saudi-Soviet Cold War

           For most countries, the condition of the public finances is driven by factors as diverse as whether the country is at war or peace, its level of employment, and its demographics. However, for some, the prices of natural resources are also of extraordinary importance. This is especially true for petrostates, nations whose economies are overwhelming

The Great Sovereign Bond Bust

           One of the most pronounced bubbles in 19th century finance was a boom in emerging market debt that hazardously swelled during the 1820s. During that decade, sovereign bonds were issued by several newly independent countries following Latin America’s successful revolt against Spanish colonial rule. These newborn borrowers found a strong market for their first bonds

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