A. Schaaffhausen Bank, Cologne 162–4, 218
ABN-AMBRO 120–1
accommodation (finance) bills 52, 62, 72, 73, 226
accountancy firms (CPAs) 120, 149–50
adaptive expectations theory 39
Adelphia Communications 20, 119, 134–5, 144
adjustable-rate mortgages (ARMs) 259
Åkerman, Johan 158, 161, 162, 164–5
Aldrich Commission, 1910 (US) 219
Alliance Capital 137
Allied Irish Bank 124
Alsace, 1827–28 crisis 161, 204
American Civil War, 1861–65 124, 164
see also United States
American Express 144
Ames, Oakes 139
Amsterdam 152, 159–60, 163, 224
1772 crisis 159–60
1799 crisis 210–11
see also Bank of Amsterdam; Holland
Arthur Andersen 22–3, 120, 131, 139
André, Alfred 165
Angelis, Tino De 122
arbitrage/arbitrageurs 21, 31, 155
Baring crisis, 1890 and 100, 166, 207
Arthur Andersen 22, 23, 120, 131–2
Asian Financial Crisis, 1997 1, 3, 4, 8, 27–8, 85, 170, 184, 186, 223, 233, 278
asset-backed securities (ABS) 74, 149
asset price bubbles 2, 56, 108, 170–1, 173, 177, 178, 183, 187–8, 229, 285
1985–89 (Japan) see Japan
1985–89 (Nordic countries) 1, 5, 27, 157
1990s (United States) see United States
1997 Asian Financial Crisis see Asian Financial Crisis
international contagion of 154ff
in NASDAQ stocks see United States, 1990s asset price bubble
see also bubbles
asset prices 2, 13, 14, 15, 25, 30, 88, 109, 112, 115
economic activity and 107–8
monetary policy and 115–16
see also real estate prices
Australia 37, 124, 164, 168, 307n54
Austria (Austria-Hungary) 21, 63
1869 crisis 165
1873 crisis (krach) 82, 151, 165–6
Baubanken 63
Austrian National Bank 82
Babson, Roger 90
Bagehot, Walter 41, 67, 84, 214, 216, 239–40, 263, 304–5n22, 327n41
on lenders of last resort 223, 224, 225, 226, 227, 228, 235, 243, 253
on Malthus 51
Baker, James 256
Ball, Sir John 73
Balzac, Honoré de 55, 141, 144
Banca d’Italia 167
Bank Act 1844 (England and Wales) 81, 82, 91, 102, 206
Bank Act 1845 (Scotland) 81
Bank of America 4, 86, 132, 195, 262–3
Bank of Amsterdam 66
Bank of Credit and Commerce International (BCCI) 124–5
Bank of England 16, 66, 72, 77, 83, 142, 211
1763 crisis 235
1890 Baring crisis and 100–1, 166, 206–7, 208, 238
1995 Baring crisis and 16, 123–4
and Northern Rock 86
discount rates 82, 102, 103, 196, 216, 225, 226, 234
East India Company and 159
as lender of last resort 214, 217, 235
South Sea Bubble and 104, 200–1
bank failures 3, 4, 168–9, 232, 278
Bank of France 51, 89, 91, 92, 93, 204, 217, 218, 225, 235–6, 241, 245, 246, 249
Bank of England, loans to 105, 162, 236, 237, 238–9
bank holidays 23, 191–3, 201, 202
Bank for International Settlements (BIS) 242, 243, 244, 249–50, 251, 252, 254
Bank of Japan 22, 36, 102, 113, 114, 115, 173, 176, 188, 284, 285, 289
Bank of Lending, Amsterdam 66
Bank of Mexico 5, 6, 179, 253, 285–6
Bank of the United States 44, 219, 224
Bankers Trust Co. 150
Banking School, on money supply 65ff, 92, 102, 215–16
central banks 15, 19, 44, 64, 77–8, 81–2, 83, 90, 115, 178, 191
investment banks 4, 9, 23, 56, 71, 74, 86, 119, 130, 149–51, 182, 183, 194, 257ff, 300–1
swindles/fraud and 117ff
see also individual banks
bankruptcies 15, 16, 59, 85–6, 105, 133, 148, 151, 157, 162, 164, 180
Banque Adam, Paris 168
Banque de Crédit Maritime, Trieste 76
Banque Générale (Banque Royale) 62
Banque du Havre 217
Banque de Lyon et de la Loire 75, 76, 146, 311n38
Banque Oustric, Paris 168
Banque de Paris et des Pays Bas (Paribas) 77
Banque de Savoie 218
Baring Brothers 236
Baring crisis, 1890 21, 100, 166, 200
Baring loan, 1819 55
Baruch, Bernard 100
Basel Agreement, 1961 249
Baubanken (Austria) 63
Bear Stearns 25, 85ff, 121, 192, 222, 262, 263, 267, 297
Belmont, Auguste 235
Benedict, Ruth 59
Bernard, Samuel 159
Beyen, J.W. 53
Biddle, Nicholas 162
bills of exchange 19, 62, 63, 64, 66, 71ff, 78, 202, 224, 235, 310n21
Black Friday, 1745 201
Black Friday, 1866 165
Black Friday, 1869 41
Black Thursday, 1929 see Great Depression
Blanqué, Pascal 81
Bleichröder, Gerson von 144
Blodgett, Henry 22, 119, 137–8, 151
Blunt, Charles 151
Boesky, Ivan 152
Böhme, Helmut 237
bonds 1, 5, 20, 45, 50, 57, 89, 95, 98, 100, 130
Panama Canal 219
Bouchard, Charles 151
Boutwell, George S. 219
Bouvier, Jean 75
Brady Bonds 177, 178, 189, 285
Braine, G.T. 226
Braudel, Fernand 41
Brazil 45, 48, 96, 156, 160, 253
1998 depreciation 98
Bretton Woods system 171, 187, 246ff, 250, 256, 283
brewery companies 49
Brunswick Bank 55
Bubble Act 1720 (GB) 53, 57, 88
bubbles 59, 74, 84ff, 96, 102, 108, 111, 113, 121, 126, 142–8, 170ff, 185ff
asset price see asset price bubbles
Mississippi Bubble, 1720 57, 158ff
South Sea see South Sea Bubble, 1720
see also crises; manias
Buenos Aires Drainage and Waterworks Company 100
Burj Dubai 107
Caldwell, Rogers 44
Canary Capital 137
cross-border 2, 157, 170, 186, 187, 190, 230, 231, 248, 276, 277, 279, 280, 281, 282, 290
venture capital 12, 56, 181, 182, 183
see also money movements
Carswell, John 47
Cassenscheine (Austria) 63
central banks 19, 21, 64, 77–8, 81–2, 83, 90, 115, 191, 224, 226
and the ‘Bagehot doctrine’ 263
and Basel Agreement 249
and the ‘lender of last resort’ 213ff, 276
and international money flows 249, 250
see also individual banks
certificates of deposit (CDs) 63, 65, 138
Chalmers, George 159
Chicago 46
real estate booms 111–12
Chicago Mercantile Exchange 77
Chicago School see monetarists
Citibank/Citicorp/Citigroup 43, 138, 151, 193
City of Glasgow Bank 155
Clapham, Sir John 41, 48, 142, 164, 211, 225, 226, 227, 235, 236, 238
Clark, Edward 197
clearing-house certificates 203ff
Clifford & Co. 58
cobweb model 48
Cole, Arthur H. 320n21
collateralized mortgage obligations (CMOs) 258–9
commodity prices
stability of 98–9
Compagnie des Indes 158
Compagnie d’Occident 142
Comptoir d’Escompte (France) 51, 166, 218
conditionality 252
condominiums, investment in 12, 45
consumption theory 49
contagion
domestic 20
international 1, 20–1, 154ff; of asset price bubbles 170ff
transmission mechanisms 156ff
Continental Illinois Bank 16, 94, 103, 210
corn prices 100
corruption see swindles/fraud
corso forzoso (Italy) 165
cotton 155–6
CPAs (certified public accountants) 149–50
crashes see crises
Crédit Agricole (France) 164
Credit Anstalt, Vienna 55, 142, 168, 243
credit-default swaps (CDSs) 121, 264
destabilization and 82–3, 84–5
Great Depression and 78–80
impact of 290–4
manias and 12, 13, 14, 28, 33–5, 46
new bases for 62ff
swindles/fraud and 117–53
Crédit Foncier (France) 164
Credit Foncier and Mobilier (GB) 97
Crédit Mobilier (France) 164
credit-rating agencies 149–50, 260
Credit Suisse First Boston 152
Crimean War, 1854–56 50–1, 164
crises 1–8
1763 54, 58, 62, 66, 73, 96, 152, 159–60, 196
1816 160–1
1825 16, 58, 83, 88, 92, 102, 105, 161, 196, 199–200, 217
1836–39 102, 103, 155, 161–2, 206, 226
1847 58–9, 91, 92, 96–7, 100, 161, 162, 195, 196–7, 215, 225
1857 51, 73, 82, 89, 92, 101, 105–6, 142, 145, 147–8, 164, 197, 203, 205–6, 219, 226, 227–8, 239
1873 21, 52, 82, 89, 97, 101, 112, 139, 144, 165–6, 197–8, 202, 220, 228, 238
1884 198
1907 21, 63, 82–3, 97, 167, 202
1929 see Great Depression
1990s/2000 1–3, 4, 5–6, 7, 24, 85, 170–1
2006–2009 1, 7–8, 9, 10, 85, 86, 108, 116, 120, 170, 191, 200, 210, 222, 257–72, 286–8, 297–8, 299, 301
causes of 21, 27, 32–3, 53, 99–104, 154–6, 157–8
currency crises 4, 11, 231; see also individual countries
as cyclical 26
development of 84
financial distress and 84–5, 90–4
historical survey 234–9
international contagion of 1, 21, 154–6
modern prevalence of 233–4, 273ff
policy implications 15–18
warnings of 84–6
see also bubbles; manias; panics
crisis management 15–18, 191–212
interventionist 199–212
by lender of last resort 198–9
domestic 213ff
international 229ff
monetarist view on 19, 199–200
non-interference 191–3
Countrywide Financial 4, 86, 262–3, 270
currency board arrangements 98
see also individual countries
Currency School
Currie & Co. 207
Darmstäder und Nationalbank (Danatbank) 142, 168, 244
Davillier, J.-C. 204
Dawes Plan/loan (1924) 45, 55, 168, 242
day traders 181
DeNeufville Brothers 58, 66, 73, 96, 152, 160
debt 2, 8, 22, 30, 71, 90, 93, 131
in developing countries 30, 31, 35, 50, 98
Mexican debt crisis, 1982 5, 6
ratio of 73–4
see also credit; loans
debt-deflation cycles 104–5, 232
defalcation see swindles/fraud
Denfert-Rocherau, J. 151
deposit insurance 23, 65, 87, 103, 104
see also crises; Great Depression
deregulation 18, 51, 56, 113–14, 127, 193, 194, 302n3
of financial institutions 56, 127, 284–5
destabilization
by cobweb responses 48
credit expansion and 78–83, 84–5
by speculation 18, 19, 20, 47–54, 57, 241–2
Dickens, Charles 152
Discount Guarantee Association, Hamburg 205
‘discredit’ concept 18, 33, 91
‘displacement’ concept 18, 27, 53–6
definition 48
manias and 48–51
Disraeli, Benjamin 228
dollar (US) 68, 180, 185, 255–6
conversion into gold 54–5
Dollfuss, Jean 204
dot.com stocks see technology stocks
Douglas, Heron & Co. 58
Dow Jones Industrial Average 20, 56–7, 183
dragon economies 6
Drexel Burnham Lambert 70–1, 128, 129
Dutch East India Company 66, 110, 320n21
East Asia, economic development 177–8
see also individual countries
East India Company (GB) 58, 139, 159
Ebbers, Bernie 132–4
financial crises and 21
in Minsky’s model 28–9
political change and 53
real estate prices and 111–15
see also euphoria
The Economist 89, 145, 216, 238
Edwards, E. Watkins 141
embezzlement see swindles/fraud
England see Great Britain
Enron 22, 23, 118–19, 129–30, 131–4
Erdman, Paul 241
Esdailes, Grenfell, Thomas & Company 206
asset price bubbles and 107–16
causes of 29
effects of 30
international 31–2
Hyman Minsky on 43
swindles/fraud and 140–1
see also economic booms; manias
Eurocurrency market 64, 65, 69
Evans, D. Morier 163
excessive leverage concept 30
floating 2, 165, 178, 186, 187, 229, 250, 279, 291
pegged 2, 6, 16, 17, 98, 168, 190, 229, 244, 246, 250, 277, 291
see also foreign exchange
Exchequer bills 197, 200, 210–12
expectations
adaptive 39–40
rational/irrational 39–40, 84–5
fallacy of composition 42, 213, 231
Fannie Mae 24, 87, 195, 263, 299, 300
Fastow, Andrew and Lea 132
Fauntleroy, Henry 141
Federal Deposit Insurance Corporation (FDIC) 65, 127, 210, 251, 262, 265, 270
Federal Reserve Act 1913 (US) 65, 224
Federal Reserve Bank of New York 82, 168, 208, 223, 227, 245, 246, 249, 252
Great Depression and 78–9, 99, 104, 167–8, 223
Federal Reserve Board 19, 77, 168, 183, 223, 227
Federal Reserve System 20, 65, 89, 91, 203, 251
Volcker shock, 1979 284
Federal Savings and Loan Insurance Corporation (FSLIC) 24, 127, 210
Fidelity group 104
financial deepening 259
financial distress 84–5, 90–4, 162, 166
swindles/fraud and 144
financial liberalization see deregulation
financial regulation 174
bank regulation/supervision 193–4
First Bank of the United States 219
First Jersey Securities 47, 138
First Republic Bank of Dallas 210
First World War see World War I
Fordyce, Alexander 58, 96, 142
foreign exchange 1, 2, 35, 120, 148
see also exchange rates
foreign exchange crises 2, 3, 6–7, 250
1825 crisis 235–6
1826–32 speculation 49–50
1857 crisis 89
Alsace crisis, 1827–28 161, 204
Paris vs London 239–40
see also Bank of France; French Revolution
Franco-Prussian indemnity 54, 165
Franklin National Bank, New York 3, 44, 103, 251
fraud see swindles/fraud
Freddie Mac 24, 87, 195, 263, 299, 300
Frederick II of Prussia 54, 160, 200
French Revolution, 1789–95 53–4, 96
on Great Depression 78–9, 81, 154–5, 215
G-5 256
see also swindles/fraud
Garber, Peter M. 111
Garnier-Pagès, Louis Antoine 213
Genoa Conference, 1922 77
1925 depression 21, 50, 53, 167–8
Berlin 112, 145, 160, 165, 237
Berlin crisis, 1763 200
Dawes loan to, 1924 242
Hamburg see Hamburg
Maklerbanken 63
see also Prussia
Glass-Steagall Act 1932 (US) 91, 144, 150–1, 168–9, 194, 298
Global Crossing 119
Glyn, Mills & Co. 207
Goddefroy, Gustav 144
gold 3, 4, 14, 31, 43–4, 48, 63, 82, 91, 93, 164, 168, 230, 235, 238–9, 242, 245, 246, 247, 275
exchange standard 77–8, 83, 154
gold discoveries 48–9, 60, 164
gold prices
1970s surge 43–4
gold-exchange standard 77–8, 83, 154
grain prices see corn prices
Granger movement 101
Grasso, Richard 135
Great Britain
1636 bubble 11
1772 crisis 96
1810 crisis 160
1825 crash and panic 88, 92, 105
1864 crisis 97
1872–73 financial distress 238
1886 crisis 73
1907 financial distress 94, 119, 167–8
Cabinet Committee on Economic Information 243
Glorious Revolution, 1688 53
see also Bank of England
Great Depression, 1928–33
causes of 21, 63, 76, 78–80, 89, 154, 167–9, 240–6
credit expansion and 78ff
as international 167–9
Keynesian view of 79–80
lenders of last resort and 227, 228
monetarist view of 79–80
Greece 170, 171, 274, 275, 287
Greenspan, Alan 10, 19–20, 29, 90, 99, 183, 186, 191, 223, 227
Grill, Carlos and Claes 72
Grubman, Jack 22, 119, 137, 139
guarantee of liabilities 206–8
Guinness, Arthur and Co. 49
Guy, Thomas 100
1836–39 crisis 236
Hatry, Clarence 142
on IMF 330n44
Hayek, Friedrich 81
hedge funds 20, 55–6, 74, 86, 95, 121, 136–7, 150, 199, 262
see also Long-Term Capital Management (US)
Herstatt AG, Cologne 3, 251, 278
Holland (the Netherlands) 59, 62
1763 crisis 235
Amsterdam see Amsterdam
tulipmania, 1636 11, 17, 59, 109–11
home-equity credit 68–9
Hoover, Herbert 154, 167, 195–6
Hoyt, Homer 111–2
Hudson, George 147
Hunt, Bunker 94
Huskisson, William 211–12
Hyndman, H.M. 305n33
Iceland 4, 10, 20, 28, 36–7, 121, 154, 186, 187, 287
ImClone 135
Indonesia, 1990s asset price bubble 1, 6, 8, 11, 24, 104, 126, 180, 253
inflation
in US 282–3
inflation rates 4–5, 181, 282–6
inflation targeting 115
information availability 303n10
ING (bank) 4
initial public offerings (IPOs) 56, 181
Innovation
financial 51, 55–6, in credit expansion 62–5, 66, 69–77, 131
insiders see outsiders/insiders
insider trading 120
Insull, Samuel 148
on international loans 35–6
on junk bonds 71
panics and 49–50, 54–5, 82, 106
in Ponzi finance 29
International Bank for Reconstruction and Development (IBRD) see World Bank
International Monetary Fund (IMF) 104, 202, 247–8
General Arrangements to Borrow 248
R.G. Hawtrey on 330n44
as lender of last resort 16, 25, 198, 231, 234, 248, 296
internet 147
investment banks 4, 9, 23, 56, 74, 119, 120–1, 130, 138, 149, 151, 174, 181–2, 183, 194, 208, 257ff, 298, 299, 300
invisible hand theory 293
irrational exuberance concept 13, 90, 180, 183, 273
irrationality see rationality
Israel, Jonathan 111
Istituto Per la Ricostruzione Industriale (IRI) 23
Italy 165
Janssen, Sir Theodore 158
Japan
1985–89 asset price bubble 1, 3, 4, 7, 8, 9, 17–18, 23, 36, 113, 125, 173–7, 176, 285, 251
1990s crisis 5, 24, 98, 176–7, 199
banking system 174–5, 175, 176
deregulation 56, 114, 174–5, 176, 285
real estate and share prices see 1985–89 asset price bubble above
Jellico, Charles 216
Johnson, Paul 196
Joplin, Thomas 16
journalism, as unethical 145–7
Juglar, Clement 155
Juglar cycle of investment 26
junk bonds 2, 20, 70–1, 128–9, 152
Kaminsky, Graciela 74
Kauffman Brothers, Hamburg 194
Kaufman, Henry 64
Keating, Charles 174
Kennedy, Joseph P. (Sr) 89
Kenyon, Cox & Co. 44
Keynes, John Maynard (Lord Keynes) 227
on Great Depression 72–3
Kindelberger, C.P. 13
King, W.T.C. 86
Kipper- und Wipperzeit mania, 1619–22 17, 54, 157–8
Kitchin inventory cycle 21
van Klavaren, Jacob 161–2
Knickerbocker Trust Company 87
Knight, Robert 173
Koechlin, Nicholas 186
Kopper, Michael 155
Korea see South Korea
Kuwaiti Souk al-Manakh 57
Kuznets cycle 21
Laffitte, Jacques 48, 168, 186, 199, 207
de Lamartine, Alphonse 79
Lamont, Thomas, W. 223
land see real estate
Latin America 17, 42, 44, 45, 113, 120, 270n33
see also individual countries
Lautenbach, Wilhelm 295n52
Law, John 51, 53, 55, 86, 110–11, 164–5, 272n73
Lay, Kenneth 155
Lazard Frères 64
LeBon, Gustave 37
LeClerc bank, Geneva 173
League of Nations 70–1, 212, 223, 225
Lebeck, Jonathan 169
Leeuw, David 111
Lehman Brothers 24, 25, 37, 74, 85–8, 132, 155, 192, 200, 223, 257–72, 287, 297
lender of last resort
amounts loaned 208–9
Bagehot on 196–7, 205, 208, 221
Bretton Woods system and 228–34
choice of 198–205
crisis management by 19–20, 180–1, 195–210
domestic 195–210, 212, 214–15, 240, 254
function 13, 19–20, 28–9, 195–210, 211–38, 253–5
in Great Depression 13, 208, 209
IMF as 13, 20, 180–1, 212–13, 216, 229–34, 255
international 13, 19–20, 211–38, 240, 253–5
monetarists on 209
monetary stability and 20
origin of concept 196–8
World War I, effects of 13, 222–8
timing of loans 209–10
Levine, Dennis 174
Lévy-Leboyer, Maurice 186
liability management 56–7, 188–90
‘liars’ loans’ 260
Lidderdale, William 182, 188–9, 220
lifeboat operations 23
Lindau, Paul 168
liquidation 28
Liverpool, Lord (Roberts Banks Jenkinson) 88, 199–200
Bretton Woods system 246ff
Dawes Plan, 1924 45, 55, 168, 242
to developing countries 35, 50, see also individual countries
Silberzug, 1857 237
Thiers rente 55
Young Plan, 1930 244
see also credit; debt; lender of last resort
London
as financial center 239–40
see also Great Britain
London Interbank Offer Rate (LIBOR) 35
Long-Term Capital Management (US) 6, 74, 94, 95, 150, 184, 208, 223, 227, 278–9
Louisiana Purchase, 1803 161
Louvre Agreement, 1987 256
Love, Robert 216
Maison Hottinguer bank 162, 214, 218
Maklerbanken (Germany) 63
Malaysia, 1990s asset price bubble 1, 3, 6, 20, 22, 107, 126, 171, 177, 179, 189, 190, 229, 254
Malthus, Thomas Robert 51
management see crisis management; liability management
manias (speculative excess)
causes of 12–13, 17, 18, 19, 39–61
credit expansion and 12, 13, 14, 28, 44–5, 62–83
development of 44–6
displacements and 48, 53–6, 57
Kipper- und Wipperzeit, 1619–22 17, 54, 157–8
monetarist view of 17
monetary expansion and 18
national differences in 59–61
objects of speculation 57–9
policy issues on 15–18
pseudo-manias 17
psychology of 42–4
as rational/irrational 39–61
swindles perpetrated during 20–1, 46–7
in technology stocks 1, 7, 15, 17, 20, 181, 183
see also bubbles; crises
Marcus, Bernard K. 44
mark (Germany) 2, 41, 78, 241, 248, 250, 275, 279, 283, 284, 290, 291, 292
market prices
irrationality in 42–61
rationality in 39–42
Marshall, Alfred 27, 42, 78, 217, 246, 310n21, 326n16
Martin’s Bank 207
Massachusetts Financial Services 137
Matthews, R.C.O. 226
Mayer, Martin 150
McCartney, R. Ray 166
McCulloch, W.R. 88
McDonough, William 208
MCIWorldCom 20, 22–3, 119, 120, 132, 133, 134, 152
McKay, Charles 159
McKesson, Robbins scandal 121–2
Mellon, Andrew 195
Merrill Lynch 4, 23, 128, 130, 138, 139, 146, 151, 208, 268, 270
Mexico 1, 5–6, 45, 50, 130, 146, 171ff, 178
1982 crisis 22, 190, 252, 284, 286, 289
1990–93 bubble 178, 179, 188, 290
1994–95 crisis 170, 184, 231–2, 235, 243, 254, 286
Mieno, Yasuki 114
Milken, Michael 70–1, 128, 129, 152, 153
Mill, John Stuart 18, 27, 49, 68, 78
on euphoria 43
criticism of 33–4
international crises in 31–3
purpose 26–7
relevance 35–8
three-part taxonomy in 29
validity 33–4
Mintz, Ilse 45
Mississippi Bubble, 1720 11, 17, 57, 58, 142, 158–9
international contagion of 158–9
Mississippi Company 57
Mitsubishi Real Estate 174
mob psychology 42–3
Mollien, François Nicholas 213
monetarists (Chicago School)
on crisis management 199
on lenders of last resort 227
liberalist doctrine 51
limits to 65–6
see also credit expansion
money
definition 67–8
types of 19
velocity of 67
see also capital flows
money supply 19, 54, 62, 63, 65, 79, 195, 214–15, 216
Banking School on 65, 66–7, 215–16
fixed 66–7
measurement of 67
uncontrolled 81
monopolies/cartels 51
Moody’s 149
moral hazard 23, 192, 195, 213, 253, 264
moratoriums 202
Morgan, E.V. 214
J. P. Morgan/JPMorganChase 24, 86, 130, 200, 204, 222, 224, 241, 252, 263, 266–7, 270
Morgan Stanley 56, 137, 139, 270
Morgenstern, Oskar 60, 155, 166, 240
mortgage-backed securities (MBSs) 74, 86, 149, 259, 262
MSNBC television 147
mutual funds 20, 23, 104, 128, 136–7, 151, 175, 177, 286
Mutualité Industrielle (Belgium) 89
Napoleon III 89
NASDAQ stocks, 1990s bubble in 6–7, 15, 17, 32, 183, 184
National Association of Security Dealers (NASD) 139
National Australia Bank, Sydney 124
National Bank of Austria-Hungary 82
National City Bank 148
National Trust Company of New York 197
Navigation Acts (GB) 164
negative carry concept 36
neo-Austrian School 81
Netherlands see Holland
New York Clearing House 221
New York Stock Exchange 6–7, 23, 32, 77, 104, 135, 183, 184, 201–2, 204
New York Warehouse and Security Company 50
New Zealand 157
Newton, Sir Isaac 47
Nikkei stock market index 24, 113, 123–4
Nordic countries, asset price bubble, 1985–89 1, 5
Nordwolle (Norddeutsche-Wolkämmerei) 244
Norman, G.W. 91
North American Free Trade Agreement (NAFTA) 5, 24, 178, 189, 253
Northern Pacific railroad 44, 50, 166
Northern Rock 4, 86, 192, 263, 264
NOW accounts 69
Nurkse, Ragnar 41
Ohio Life Insurance and Trust Company 142, 164, 203
Open Market Investment Committee, Federal Reserve Bank 227
Organization of Petroleum Exporting Countries (OPEC) 51
d’Ormesson, Wladimir 89
Overend, Gurney & Co. 41, 97, 141, 165
overshooting/undershooting concept 3, 35, 230, 231, 232, 279
Overstone, Lord (Samuel Jones-Loyd) 84, 91, 102, 194–5, 215
overtrading concept 30, 33, 35, 57, 84, 160, 161, 167, 226
Panama Canal bonds 219
panics
1906–7 21, 82–3, 97, 167–8, 222, 238–9
definition 103
interest rates and 50, 54–5, 82, 106, 168
swindles perpetrated during 23–4
see also bubbles; crises
Paris, as financial center 239–40
see also France
Parmalat 138
Pedersen, Jørgen 242
Peel, Sir Robert 222–3
Pereire brothers 218
Plaza Agreement, 1985 256
Poland 51–2
Ponzi, Charles 29, 51, 52, 117, 118, 141
Ponzi finance 14–15, 20, 29–30, 52, 70, 71, 109, 117, 118, 125, 137, 140, 143, 148, 288
Popper, Karl 40
Portugal 287
pound sterling 16, 54, 63, 73, 77–8, 93–4, 159, 168, 226, 241–2, 245–6, 248–9, 275
Powell, Ellis T. 207
prices see asset prices; commodity prices; market prices
privatization 28, 52, 98, 157, 177, 189, 290
Franco-Prussian indemnity 54, 165–6
lender of last resort in 218
see also Germany
psychology
of contagion 156–7
Maginot line effect 51
of the mob 43–5
of rationality 43–5
pyramid schemes 14–15
quality of debt 69–71
Quantum Fund (George Soros) 303n8
Quattrone, Frank 152
Radcliffe Commission (GB) 67
railroads 96, 97, 101, 162, 164, 166, 147
1830/1840s booms in 45, 92, 162, 225
ratio of debt 73–4
rational expectations theory 39–40, 84–5
rationality
of individuals 39–40, 42–53, 84–5, 304n22; irrationality 48–50, 54
of markets 33–6; irrationality 42–53
psychology of 42–3
real bills doctrine 67
real estate
stock markets and 1, 12, 30, 32, 59, 64, 111–15, 173–4
speculation in 44–5, 55–6, 57, 64, 188–9
Real Estate Investment Trusts (REITs) 55–6, 113, 202
real estate prices 31, 90, 176, 185–6
economic booms and 5, 108, 111–15
in Japan see Japan
in US 180–1
recessions see crises
recoinage 54
regulation see bank regulation/supervision; deregulation
Reichsbank (Germany) 91, 93, 224, 238, 244
Reinhart, Carmen 81
reportage system 63
reports see call money
repression, financial 51
Resolution Trust Corporation (RTC) (US) 94, 210
revulsion concept 18, 33, 34, 91, 154
Ricardo, David 214–15
Richardson, William A. 219
Riksbank (Sweden) 66
Rite-Aid 152
rogue traders see swindles/fraud
Rohatyn, Felix 71
Rothschild family 51, 55, 77, 195, 207, 218, 235, 236, 237, 241
Royal African Company 161–2, 168
Royal Bank of Scotland 4, 120, 192
Rusnak, John 124
1772 crisis 235
1998 ruble crisis 6, 95, 234, 280
Baring crisis, 1890 and 206–7
IMF and 234
see also Soviet Union (former)
Sadleir, John 151
Salomon Smith Barney 22, 130, 138
Sayers, Richard S. 238
Scandinavia see Denmark; Norway; Sweden
Schaaffhausen, Abraham 163–4
Schäffle, Albert E.F. 73
Schama, Simon 110
Schuyler, Robert 147–8
Schwab, Charles 181
Schwartz, Anna 78–9, 154, 155, 215, 227
on Great Depression 78–9, 154, 155
Scrushy, Richard 135
Second Bank of the United States 91, 160–1, 219
Second World War see World War II
Securities and Exchange Commission 46, 77, 120, 131, 136–7, 140, 147, 149, 194, 266
Selgin, George 81
Sepoy Mutiny, 1857 (India) 54
Shell Oil 136
Sherman Silver Act 1890 (US) 54
shutdown, of stock markets 201–2
Silberzug loan, 1857 106, 206, 237
silver 19, 54, 62–3, 64, 94, 104, 105, 160, 161, 164, 200, 205, 206, 235–6, 237
Simons, Henry 80
Sinclair, Sir John 211
Sindona, Michele 44
Singapore 16, 123, 124, 178, 180
Skilling, Jeffrey 132
on South Sea Bubble 41–2
Smithsonian Agreement, 1972 2, 250
Snyder, Harold Russell 148
Società Bancaria Italiana 21, 167, 222
Soros, George 254
South Africa 8, 21, 37, 51, 164
South Korea 1, 6, 24, 31, 85, 178, 179, 253, 255
South Sea Bubble, 1720 17, 41–2, 43, 47, 53, 57–8, 62, 88, 96, 100, 140, 142, 143, 144, 145, 152, 153, 158–9, 200, 273
Adam Smith on 41–2
international contagion of 158–9
South Sea Company 47, 53, 57, 62, 88, 93, 104, 140, 142, 143, 144, 151, 152, 153, 200, 305n33
Soviet Union (former) 51
see also Russia
special financing facilities/vehicles (SFVs) 131
speculation 12–15, 30, 32, 35, 44–5, 57–9, 74–7
as destabilizing 41, 46–53, 57–9
national differences in 59–60
in technology stocks 6–7, 12, 28, 181, 182, 281
see also euphoria; manias
Spencer, Herbert 214
spinning, of share allocations 183
Sprague, O.M.W. 97, 105, 144, 203, 219–20
Standard and Poor’s 500 futures 77
Standard Oil Company 97
State Bank of Russia 207
Stead, Christina 46, 153, 314n36
stocks see bonds
Strong Funds 137
Strousberg, Bethel Henry 144, 145
subprime mortgages 25, 93, 261
Sullivan, Scott 133
Sumitomo Corp./Bank 124, 125, 174
Swartz, Mark 124
Sweden 1, 4, 5, 72, 157, 205, 229, 278, 285, 288
Riksbank 66
Swift, Jonathan, on the South Sea Bubble 144
swindles/fraud 20, 88–9, 117–153
bucket/boiler shops 46, 47, 138
historical survey 117–153
see also gambling
Sword Blade Bank (GB) 57, 62, 104, 200, 201
Taiwan 179
technological innovation 18, 27, 28, 56, 181
technology stocks, speculation in 6–7, 12, 28, 181, 182, 281
Temin, Peter 79
Thailand, 1990s asset price bubble 1, 2, 6, 22, 126, 170, 177, 181
Thayer, Paul 146
Thiers, Louis Adolphe 217, 236
Thiers rente 55
Third World countries see developing countries
Thomson, J. Poulett 88
Timberlake, Richard 81
‘too big to fail’ 24, 87, 192, 195, 209, 261, 266–70, 297
and moral hazard 270–2
Transparency International (corruption index) 121
trekschuit 110–11
Troubled Assets Relief Program (TARP) 267
tulipmania, 1636 17, 109–11, 273
Union Générale, Paris 74–7, 97, 142, 145, 155, 166, 218, 224
Union Pacific railroad 97, 139
1819 crisis 160–1
1870s depression 165–6
1929 crisis see Great Depression
1973–74 crisis 9
1987 crisis 77
1990s asset price bubble 1, 6, 7, 9, 15, 17, 32, 102, 170–1, 180–5
central bank, early lack of 82–3
China and 62
Comptroller of the Currency 194
Dawes Plan/loan, 1924 45, 91, 168, 242
the dollar see dollar
as lender of last resort, domestic 218–23; international 16, 219, 296
housing bubble, 2000s 45–6, 74, 86, 258–64
Mexico, financial assistance to 234, 296
monetary policy 292
NASDAQ stocks see 1990s asset price bubble above
real estate prices 180–1
swindles perpetrated in 20–1, 117–153
thrift institutions 3, 71, 126–7
trade deficit 255
Volcker shock, 1979 284
Y2K problem in 99, 102, 185, 223
United States Treasury 4, 24, 87, 91, 95, 114, 127, 128, 181, 200, 210, 219, 221, 228, 252, 253, 262, 263, 267–8, 269, 270, 285, 287, 296, 299, 300
‘upside-down’ mortgages 93, 261
de Vallée, O. 89
Van Vleck, George, W. 147–8, 239
Vaubel, Roland 81
venture capital (VC) 12, 56, 181–2, 183
Vesco, Robert 152
Vienna Stock Exchange 202
Vogel, Ezra (Japan as Number One) 5, 27, 108
Volcker shock, 1979 (US) 284
‘W banks’ (Wiggins, Wildes and Wilson) 103, 200, 226
war 53, 59, 66, 110, 158, 159–60, 164–5, 201, 239–40
displacement concept and 53
see also specific wars
warnings of crises 88–90
Wasserman, Jacob 142
Wasserman, Oskar 244
Watson, Overend & Company 141
Weill, Sandy 138
wheat prices see corn prices
White, Lawrence 81
Wigmore, Barry 148
Wilson, Charles 50, 58, 160, 235, 302n22
Wimmer, Larry 46
Winans, R. Foster 146
Winnick, Gary 135
Wirth, Max 74, 82, 145, 165, 212
Wisselbank (Holland) 66
Wisselruiti (Holland) 62, 66, 159
Withers, Hartley 239
Wolter, Johann 163
World Bank 108, 172, 177, 202, 247, 248, 254, 256
World Economic Conference, 1933 243
World Trade Center, attack on, 2001 201
World War I, 1914–18
lender of last resort after 16, 240–6
World War II, 1939–45 63, 80, 113, 120, 231, 246, 248
Yeager, Leland 81
yen (Japan) 2, 22, 113, 115, 157, 173, 177, 188–9, 190, 199, 284–5, 288, 289, 292–3
Zola, Emile 145