capital markets – a brief history
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Capital Markets – a brief history
Paul Pickup
© Catalyst Development Ltd 2002
Capital Markets – a very brief history
• 1844 Joint Stock Companies Act• 1913 and all that• The effect of two world wars + cold war socialism• Milton Friedman and monetarism-ish• Capital Markets golden age• Lessons from History?
© Catalyst Development Ltd 2002
1844 Joint Stock Companies Act
• Oldest SE began in 1602. • UK Laws
1817 An Act for regulating the Proceedings of certain Public Companies and Corporations . . .
1837 Chartered Companies Act
1844 Joint Stock Companies
• London, New York, Paris were capital centres.
© Catalyst Development Ltd 2002
1913 and all that
• Global trade after various wars
• Telegraph• Ticker tape• Single currency in the U.S.• Federal Reserve Act of
1913
© Catalyst Development Ltd 2002
The effect of two world wars + cold war socialism
• Massive rebuilding – Marshall plan
• Broken economies• Communism and
socialism• State run industries• State pensions• Retreat of Capital
Markets to the U.S.
© Catalyst Development Ltd 2002
Milton Friedman and monetarism-ish
• Keynesian economics failed
• Oil crisis 1970s• Re-emergence of
global trading• Western countries
became uncompetitive
• Monetarism introduced by:
© Catalyst Development Ltd 2002
Capital Markets golden age
• 1990s onwards!
• IMF Loans did not work
• Funding agencies encouraged capitalism
• Boom in Stock Exchanges
• Privatisations• Deregulation of
monopolies• Short term gain for
governments
We are back to 1913
BUT – is based on international trading agreements
AND - peace
It does not take long for an uprising to happen
Hitler in jail; writes Mein Kampf First Nazi gains in Reichstag
1924
Nazi popularity declines; party is viewed as a joke by many
1927
Reichstag elections: Nazis lose heavily: keep only 12 seats
1928
WALL STREET CRASH – affects all major European economies
1929
Reichstag elections: Nazi Party now 2nd largest party with 107 seats. The S.A. (Brownshirts) used freely to intimidate voters.
1930
Nazis largest party in Germany with 230 seats ( July) Reichstag still in deadlock (no political party in clear control) (November)
1932
Hitler appointed Chancellor by Hindenburg (January) Reichstag Fire (Communists blamed) (February 27) Enabling Act (Hitler granted unlimited powers for four years) (Mar 23) Reichstag Elections: 92% vote for Nazi candidates (November
1933
Night of the Long Knives (Party housecleaning) (J une 30)
1934
Nuremberg Laws of Citizenship and Race (Sept 15) (Beginning of anti-J ewish acts)
1935
Kristallnacht (anti-J ewish acts committed against businesses, synagogues and homes) (November 9)
1938
Outbreak of second world war 1939
© Catalyst Development Ltd 2002
Paul Pickup – Trading Technology
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