Financial Innovation, Regulation and Crises in History

193 Pages·2015·1.02 MB·English

by  Harold James

Banking, Money and International Finance
Financial Innovation,
Regulation and
Crises in History
Edited by Piet Clement,
Harold James and
Herman Van der Wee
FINANCIAL INNOVATION, REGULATION AND
CRISES IN HISTORY
Banking, Money and International Finance
Titles in this Series
Alternative Banking and Financial Crisis
Olivier Butzbach and Kurt von Mettenheim (eds)
www.pickeringchatto.com/banking
FINANCIAL INNOVATION, REGULATION AND
CRISES IN HISTORY
Edited by
Piet Clement, Harold James and Herman Van der Wee
PICKERING & CHATTO
2014
Published by Pickering & Chatto (Publishers) Limited
21 Bloomsbury Way, London WC1A 2TH
2252 Ridge Road, Brookfi eld, Vermont 05036-9704, USA
www.pickeringchatto.com
All rights reserved.
No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise
without prior permission of the publisher.
© Pickering & Chatto (Publishers) Ltd 2014
© Piet Clement, Harold James and Herman Van der Wee 2014
To the best of the Publisher’s knowledge every eff ort has been made to contact
relevant copyright holders and to clear any relevant copyright issues. 
Any omissions that come to their attention will be remedied in future editions.
british library cataloguing in publication data
Financial innovation, regulation and crises in history. – (Banking, money and
international fi nance)
1. Financial crises – History. 2. Economic stabilization – History. 3. Financial
institutions – Government policy – History. 4. Financial institutions –
Management – History.
I. Series II. Clement, Piet editor. III. James, Harold, 1956– editor. IV. Wee,
Herman Van der editor.
338.5’43-dc23
ISBN-13: 9781848935044
e: 9781781444726
∞

Th is publication is printed on acid-free paper that conforms to the American
National Standard for the Permanence of Paper for Printed Library Materials.
Typeset by Pickering & Chatto (Publishers) Limited
Printed and bound in the United Kingdom by CPI Books
CONTENTS
Acknowledgements vii
List of Contributors ix
List of Figures and Tables xv
Note on the Text xvi
Part I: Introduction
Foreword: Financial Crises – Will it be Diff erent Next Time? – Ivo Maes 1
1 Financial Innovation, Regulation and Crises: A Historical View
– Piet Clement, Harold James and Herman Van der Wee 5
Part II: Episodes of Financial Innovation, Regulation and Crisis in History
2 Contract Enforcement on the World’s First Stock Exchange
– Lodewijk Petram 13
3 Co-operative Banking in the Netherlands in pre-Second World War
Crises – Joke Mooij 37
4 Th e Discreet Charm of Hidden Reserves: How Swiss Re Survived the
Great Depression – Tobias Straumann 55
5 Th e Redesign of the Bank–Industry–Financial Market Ties in the US
Glass–Steagall and the 1936 Italian Banking Acts
– Federico Barbiellini Amidei and Claire Giordano 65
6 Regulation and Deregulation in a Time of Stagfl ation: Siegmund
Warburg and the City of London in the 1970s – Niall Ferguson 85
7 Financial Market Integration: An Insurmountable Challenge to
Modern Trade Policy? – Welf Werner 107
Part III: Innovation, Regulation and the Current Financial Crisis
8 Something Old and Something New: Novel and Familiar Drivers of
the Latest Crisis – Adair Turner 127
9 To Regulate or Not to Regulate: No Easy Fixes for the Financial System
– William R. White 139
Notes 143
Index 169

ACKNOWLEDGEMENTS
Th e conception of this volume had its origin in the Conference ‘Responding to
Crises in the Global Financial Environment – Risk Management and Regula-
tion’, that took place in 2010 in Brussels at the National Bank of Belgium, and
that was organized by the European Association for Banking and Financial His-
tory (EABH). Th e editors would like to express their thanks to the EABH, and
in particular to Carmen Hofmann and Gunnar Marquardt, as well as to Philip
Good and Stephina Clarke at Pickering & Chatto for their unfailing support.
– vii –

LIST OF CONTRIBUTORS
Federico Barbiellini Amidei is an Economist at Banca d’Italia, Economic
Research Department, Economic and Financial History Unit. Barbiellini
Amidei obtained a degree in International Economics at Bocconi University,
Milan (1993), and studied at Carnegie Mellon University, GSIA-PhD Program
in Economics, Pittsburgh (1998–9). His main fi elds of interest are: economics
of innovation, Italian economic history, FDI and MNC development, corporate
fi nance and fi nancial regulation in a historical perspective.
His recent publications include: F. Barbiellini Amidei and C. Antonelli, Th e
Dynamics of Knowledge Externalities. Localized Technological Change in Italy
(Cheltenham: Edward Elgar, 2011); F. Barbiellini Amidei and A. Goldstein,
‘Corporate Europe in the US: Olivetti’s Acquisition of Underwood Fift y Years
On’, Business History (2012); F. Barbiellini Amidei, J. Cantwell and A. Spadav-
ecchia, ‘Innovation and Foreign Technology’ in G. Toniolo (ed.), Th e Oxford
Handbook of the Italian Economy Since Unifi cation (New York: Oxford Univer-
sity Press, 2013).
Piet Clement obtained his PhD in history from the University of Leuven (KU
Leuven), with a study on Belgian public fi nance from 1830 to 1940. Since
1995 he has been employed at the Bank for International Settlements in Basel,
Switzerland. His research interests span the history of international fi nancial
cooperation in the twentieth century, the history of central banking and colonial
history of central Africa.
His recent publications include: G. Toniolo, with the assistance of P. Clement,
Central Bank Cooperation at the Bank for International Settlements, 1930–1973
(Cambridge: Cambridge University Press, 2005); C. Borio, G. Toniolo and P.
Clement (eds), Past and Future of Central Bank Cooperation (Cambridge: Cam-
bridge University Press, 2008); P. Clement, ‘Th e Term “Macro-Prudential”:
Origins and Evolution’, BIS Quarterly Review (March 2010).
Niall Ferguson, MA, D.Phil., is Laurence A. Tisch Professor of History at
Harvard University and William Ziegler Professor of Business Administration
– ix –