Suchergebnisse

International audience ; Economic historians often take for granted the idea that financial centres have followed one standard bottom-up development process, gradually evolving from commercial hubs to banking places. This chapter suggests that such an interpretation is rather simplistic. The analysis is focused on a remarkable counterexample: the sudden emergence of Brussels as an international financial centre in the mid-19th century. The case study is articulated into five parts, each one looking at a different aspect of the growth of the new centre (capital resources, business elites, regulation, the domestic money market, and the foreign exchange market). The conclusion is that the top-down process observed in the Brussels experience sheds light on the fact that semi-institutional actors (such as central banks, or commercial banks connected to the political power) can successfully enact specific policies aimed at enhancing local financial development.

Money market structures shape monetary policy design, but the way central banks perform their operations also has an impact on the evolution of money markets. This is important, because microeconomic differences in the way the same macroeconomic policy is implemented may be non-neutral. In this paper, we take a panel approach in order to investigate both directions of causality. Thanks to three newly-collected datasets covering ten countries over two centuries, we ask (1) where, (2) how, and (3) with what results interaction between money markets and central banks has taken place. Our findings allow establishing a periodization singling out phases of convergence and divergence. They also suggest that exogenous factors – by changing both money market structures and monetary policy targets – may impact coevolution from both directions. This makes sensible theoretical treatment of the interaction between central bank policy and market structures a particularly complex endeavor.

International audience ; The collapse of Overend Gurney and the ensuing crisis of 1866 was a turning point in British financial history: this was the last time a serious disruption took place in the London money market until 2007-8. The achievement of relative stability was due to the Bank's willingness to offer generous assistance to the market in a crisis, combined with an elaborate system for discouraging moral hazard. The Bank's assistance was not anonymous because it monitored the names on its discounted bills. When Overend Gurney sought extraordinary assistance from the Bank, their request was refused on the grounds that the bills offered did not comply with standard eligibility rules. The Bank's refusal forced Overend to suspend payments and there was a general panic in the market. The Bank responded by lending freely and raising Bank rate to very high levels. The new policy was crucial in allowing for the establishment of sterling as an international currency. When in 1890 Baring Bros got into trouble, however, the Bank reacted differently and set up a bailout of the failing institution. Such such a contrasting attitude was dictated by the dissimilar position occupied by Overends (a bill broker) and Barings (an accepting house) within the London money market.

International audience ; The collapse of Overend Gurney and the ensuing crisis of 1866 was a turning point in British financial history: this was the last time a serious disruption took place in the London money market until 2007-8. The achievement of relative stability was due to the Bank's willingness to offer generous assistance to the market in a crisis, combined with an elaborate system for discouraging moral hazard. The Bank's assistance was not anonymous because it monitored the names on its discounted bills. When Overend Gurney sought extraordinary assistance from the Bank, their request was refused on the grounds that the bills offered did not comply with standard eligibility rules. The Bank's refusal forced Overend to suspend payments and there was a general panic in the market. The Bank responded by lending freely and raising Bank rate to very high levels. The new policy was crucial in allowing for the establishment of sterling as an international currency. When in 1890 Baring Bros got into trouble, however, the Bank reacted differently and set up a bailout of the failing institution. Such such a contrasting attitude was dictated by the dissimilar position occupied by Overends (a bill broker) and Barings (an accepting house) within the London money market.

International audience ; The National Monetary Commission was deeply concerned with importing best practice. One important focus was the connection between the money market and international trade. It was said that Britain's lead in the market for " acceptances " originating in international trade was the basis of its sterling predominance. In this article, we use a so-far unexplored source to document the portfolio of bills that was brought up to the Bank of England for discount and study the behavior of the Bank of England during the crisis of 1866 (the so-called Overend-Gurney panic) when the Bank began adopting lending of last resort policies (Bignon, Flandreau and Ugolini 2012). We compare 1865 (a " normal " year) to 1866. Important findings include: (a) the statistical predominance of foreign bills in the material brought to the Bank of England; (b) the correlation between the geography of bills and British trade patterns; (c) a marked contrast between normal times lending and crisis lending in that main financial intermediaries and the " shadow banking system " only showed up at the Bank's window during crises; (d) the importance of money market investors (bills brokers) as chief conduit of liquidity provision in crisis; (e) the importance of Bank of England's supervisory policies in ensuring lending-of-last-resort operations without enhancing moral hazard. An implication of our findings is that Bank of England's ability to control moral hazard for financial intermediaries involved in acceptances was another reason for the rise of sterling as an international currency.

International audience ; The National Monetary Commission was deeply concerned with importing best practice. One important focus was the connection between the money market and international trade. It was said that Britain's lead in the market for " acceptances " originating in international trade was the basis of its sterling predominance. In this article, we use a so-far unexplored source to document the portfolio of bills that was brought up to the Bank of England for discount and study the behavior of the Bank of England during the crisis of 1866 (the so-called Overend-Gurney panic) when the Bank began adopting lending of last resort policies (Bignon, Flandreau and Ugolini 2012). We compare 1865 (a " normal " year) to 1866. Important findings include: (a) the statistical predominance of foreign bills in the material brought to the Bank of England; (b) the correlation between the geography of bills and British trade patterns; (c) a marked contrast between normal times lending and crisis lending in that main financial intermediaries and the " shadow banking system " only showed up at the Bank's window during crises; (d) the importance of money market investors (bills brokers) as chief conduit of liquidity provision in crisis; (e) the importance of Bank of England's supervisory policies in ensuring lending-of-last-resort operations without enhancing moral hazard. An implication of our findings is that Bank of England's ability to control moral hazard for financial intermediaries involved in acceptances was another reason for the rise of sterling as an international currency.

The National Monetary Commission was deeply concerned with importing best practice. One important focus was the connection between the money market and international trade. It was said that Britain's lead in the market for acceptances originating in international trade was the basis of its sterling predominance. In this article, we use a so-far unexplored source to document the portfolio of bills that was brought up to the Bank of England for discount and study the behavior of the Bank of England during the crisis of 1866 (the so-called Overend-Gurney panic) when the Bank began adopting lending of last resort policies (Bignon, Flandreau and Ugolini 2011). We compare 1865 (a normal year) to 1866. Important findings include: (a) the statistical predominance of foreign bills in the material brought to the Bank of England; (b) the correlation between the geography of bills and British trade patterns; (c) a marked contrast between normal times lending and crisis lending in that main financial intermediaries and the shadow banking system only showed up at the Bank's window during crises; (d) the importance of money market investors (bills brokers) as chief conduit of liquidity provision in crisis; (e) the importance of Bank of England's supervisory policies in ensuring lending-of-lastresort operations without enhancing moral hazard. An implication of our findings is that Bank of England's ability to control moral hazard for financial intermediaries involved in acceptances was another reason for the rise of sterling as an international currency.