Essay on Weekly Course Outlines

Submitted By AbhimanyuSanghi
Words: 3872
Pages: 16

Week 1
The First Modern Capital Markets
Commercial Revival of the Middle Ages and Renaissance, 1000-1500
Business org: guilds, regulated associations (eg, Merchants of the Staple)
Partnerships and shares
Bancos to banks (Italy: deposit/discount, merchant, and pawn banks)
Bills of exchange
European Discovery of the New World
The Price Revolution
Spanish/Habsburg dominance of 16th C
Long-term annuities
Rise of Dutch Republic, late 16th & 17th centuries
Dutch financial innovations
Public debt
Securities markets
Wisselbank (Bank of Amsterdam)
Trading companies, eg Dutch East India Company
(New Amsterdam)
(Tulip mania of 1630s)
Rise of England
Defeat of Spanish armada, 1588
New world colonies, 1580s, 1607Trading companies, eg East India Company
Divine right of kings and finance
Goldsmith bankers
1672 Stop of Exchequer
Glorious Revolution of 1688-England gets a Dutch king, Parliament's power increases War finance and debt
Financial innovation
Bank of England, 1694
New methods of borrowing
Exchequer bills
Long-term annuities
Debt management to 1720 in France and England
John Law and Mississippi Bubble in France
South Sea Bubble in England
International speculation and capital movements
Long-term effects of the bubbles in England and France
Attitudes toward banks and securities markets
Regulatory stirrings
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Some "Financial Revolutions" in emerging markets that became economic and financial leaders (in parens, authors who have studied these matters)
Lydia (Turkey now), 7th-6th centuries BCE
Coinage (Croesus, a Lydian king, became "rich as ....")
Italian city states, medieval and renaissance
Institutions: deposit/discount/exchange banks, int'l merchant banks, pawn banks Instruments: deposits, loans, bills of exchange, marine insurance, state loans
Dutch, mid 16th to early 17th centuries
Elements of "Dutch Finance" (Neal, Hart, Vries and Woude, Baskin-Miranti):
Negotiable international bills of exchange (Van der Wee)
Large public debts in form of negotiable securities, funded by high taxes (Tracy)
Wisselbank (Bank of Amsterdam,1609)--exchange/payments system
Currency stability--adherence to specie (gold/silver) standards
Private banks (small, unincorporated)
Tradable equity shares in permanently capitalized companies
Secondary securities markets for debt and equity
Derivatives (options, futures, "time bargains")
England, 1688 to 1750s (Dickson, Brewer, Neal, Baskin-Miranti)
Elements of "English Finance":
"Dutch Finance" plus:
Central/public bank (large private corporation -> central bank)
Domestic money/bill-of-exchange market
Scotland, 1750-1845 (Cameron); also tied to English system
Elements of "Scotch Finance":
Banking co-partnerships with branches, freedom of note issue, small notes USA, 1790-1830s (Baskin-Miranti, Timberlake, Sylla)
"English Finance" and "Scotch Finance" plus:
Central/public bank with branches, chartered & owned in part by US government Competitive corporate banks with ltd. liability and tradable equity, chartered by state governments with fiscal interests in banking, and later (1838- ) under general incorporation laws (free banking)
Competitive non-banking corporations with tradable equity securities and widespread stock and bond markets
Links of banking system and securities markets; call loans, securities collateral 2

Continental Europe, mid-19th century (Landes)
Elements borrowed from Dutch and English finance, plus:
Credit mobiliers, joint stock banks with ties to non-fin'l companies
Japan, 1880-1900 (Tamaki)
Matsukata (Finance Minister) combines many of above elements, plus others (e.g. foreign trade/finance bank, special long-term credit banks, postal savings) under strong government control
Zaibatsu (conglomerate enterprises with bank/finance arms)

3

Week 2
1719-20 French and English "bubbles"--ctd
What was John Law up to? A "modern" ahead of his time, with fiat money?
Short-term aftermath: tradable public securities (rentes and consols)
Longer-term aftermath: England reorganizes and marches forward…