Finance & History
By Carmen Hofmann
Finance & HistoryMar 11, 2022
Bank of America
The Great Depression remains the largest financial crisis in American history. Bank of America is one of the largest banks in the United States. At the time, the Bank did something remarkably well in order to maneuver the turbulent waters of that great crisis. What was it and how did the bank do profitable business as much as foster economic and structural change in difficult economic circumstances? Sarah Quincy brings new archival evidence from California archives to the table to discuss credit, crisis and recovery.
Sarah Quincy (Vanderbilt) in conversation with Carmen Hofmann (eabh).
Exchange Rate History
Was there a world before inflation targeting?
Alain Naef (Banque de France) and Carmen Hofmann (eabh) talk about currencies and exchange rates. More precisely about how pound sterling was managed on a daily basis, how Black Wednesday (1992) ended active exchange rate management in Great Britain and why the story of sterling after 1945 is the story of the decline of the British empire.
This episode is about the world's growing dependence on debt financing and current challenges to the world economy. The promise once made that deeper and larger financial markets would make our economies more stable did not hold true. What happened instead? What is meant by the paradox of stabilisation policies and central bank safety nets? What can history teach us about risks and structural matters in the financial system? Do we need a re-assessment of the Great Financial Crisis? And if so, should we look towards psychology for answers rather than maths?
Moritz Schularick (Bonn, Paris) & Carmen Hofmann (eabh)
discuss financial leverage, fragility, central banks' balance sheets and new economic thinking.
The New York Stock Exchange
How to build an economy?
Come and follow Hugo Bänziger (eabh) & Pete Asch (NYSE) to the creation of the modern US American economy and their views on the historical roots of the country's current dynamic economy. Together they discuss the creation of the US bond market, the role of Hamilton, the significance of the Buttonwood Agreement and the role of equity. More than helping build a modern state, the New York Stock Exchange was the driving force behind New York becoming a powerful financial center. How did that happen? Was it all keeping the early lead? Peter Ash shares insights from his archive, and more than that why he thinks the company's vault holds one of the keys to its future success.
How to make a business out of business history?
How do the Swedes do it?
Here comes a straightforward conversation between Anders Sjöman (Stockholm) and Carmen Hofmann (eabh) about the Centre for Business History in Stockholm. The organisation preserves Swedish business history since 1974 and has made a profitable business out of helping companies preserve their history and share their heritage. Why should we put money into preserving archives and exploiting history? How to turn historical material into a strategic asset for business development? Listen to Anders’ fascinating answers to these questions.
The Dutch East India Company
Is it advisable to combine colonial warfare with trade? Private interests with state interests for business?
A talk about early modern risk management, the birth of corporate finance and corporate governance during the Dutch Golden Age.
In this conversation, Joost Jonker (Utrecht) and Gabriella Massaglia (eabh) discuss the world's first corporation with modern features such as permanent capital, entity shielding, separation of ownership and management, freely transferable shares and modern liability.
Hyperinflation as a catalyst for transformation?
Nathan Marcus (Ben Gurion University in Beer Sheva) & Carmen Hofmann (eabh) discuss the extreme acceleration of inflation and its consequences at the end of the Austro- Hungarian Empire in 1918. The transition from a single economic space in Central Europe into separate national economies was marred by the experience of hyperinflation. Nathan explains why hyperinflation is so bad, why it is explicitly a modern phenomenon and how it intrinsically connects the financial with the political sphere.
Currency & War
Are all wars fought for money?
Kevin Clancy (Royal Mint London) & Carmen Hofmann (eabh) in conversation about 500 years of experience with currency in Britain. Kevin reveals some extraordinary cases in history that remind us of the close relationship between money and power, wars' influence over currency and currency reform, the public relations of money and the role of new money for new states.
The Louisiana Purchase
A story of empires, of financing war and risk and reward in uncertain times.
Larry Neal (Illinois) & Carmen Hofmann (eabh) in conversation about the underrated role of individuals in financial history - compared to the role of political actors; the Louisiana Purchase as an 'unprecedented financial deal'; the emergence of internationally marketable sovereign debt and other options of financing empires and revolutionary states.
The Public Banks of Naples
Is there good beyond profit?
Lilia Costabile (University of Naples) and Carmen Hofmann (eabh) take a long view back at the creation and functioning of the Public Banks of Naples in the 16th century. These banks developed as auxiliary departments of charitable institutions and became the backbone of the Kingdom's financial and economic success. How did they achieve long-lasting success and resilience? And can we take inspiration for current debates about how to create a resilient financial system or how finance makes a significant contribution to society as whole?
In their talk about Gentlemen Bankers, Susie Pak (St.John's University) & Carmen Hofmann (eabh) focus on the social and economic circles of one of America's most renowned and influential financiers: J.P. Morgan. Susie tells an intriguing story about how economic and political interests intersected with personal rivalries and friendships among the Wall Street aristocracy during the first half of the twentieth century. These historical precedents are all the more relevant in a time when we redefine trust in the financial sector, the concepts of risk and responsibility and the inclusiveness of our work and social lives.
Are we back to the inflationary environment of the 1970s? During these tumultuous times of post covid recovery, unprecedented monetary policies, and the War in Ukraine, Thomas Mayer (Flossbach von Storch) & Carmen Hofmann (eabh) talk about money and debt in historical perspective, about what drives inflation, the role of the state and the revolutionary idea of digital currency competition as the way forward for the Euro.
Culture and Ethics in Finance
Hugo Bänziger (eabh) and Walter Kielholz (Swiss Re), two leading figures in finance in the 1980s and 90s give true insights into the banking and insurance business in a period of change from nationalisation to privatisation, when the spreads between lending and borrowing were immense and the states involvement in the business resulted in endless piles of paper rather than countries economic development. The core topic of their conversation is ethics, conflicts of interest, liability and risk in the financial world; how these changed over time and ultimately let to the Great Financial Crises that started in 2007.
Banco de Portugal
Filipe Fernandes (Banco de Portugal) & Carmen Hofmann (eabh) talk about the Bank of Portugal, modern Portuguese history, the vast extent of the Bank's archive and one of the most famous cases of financial fraud.
Hugo Bänziger (eabh) and Thomas Mayer (Flossbach von Storch Research Institute) discuss Monetary Unions from the Latin Currency Union to the European Monetary Union of today.
Why are monetary unions created? Which are the drivers? If monetary unions are mere devices to obtain political power, what motivates independent countries to join? Do political aspirations always dominate economic reason? Or is the facilitation of international trade the one most important factor to participate in these standard setting unions?
Inflationary monetary policies (seignorage) are ancient techniques of financing the state, as much as the migration of paper money towards the North of Europe has historical precedent for a variety of reasons. Now, how do these insights give perspective to what is happening on the stage of international monetary policy? Does Europe today compare to the late Roman Empire?
*The topic will further be discussed at the 2022 eabh annual conference in cooperation with the Bulgarian National Bank on 1 July 2022 in Sofia, Bulgaria. We are still open for submissions: http://bankinghistory.org/wp-content/uploads/2022_Sofia_Monetary-Unions-in-History.pdf
The World Bank Group
Carmen Hofmann (eabh) and April Miller (The World Bank Group) talk about archival material from Afghanistan to Zimbabwe and how to inspire history research.
April gives fascinating insights into the workings of the World Bank Group, the oldest and largest global multi-regional and multi-sectoral development bank; a Bank that was set up to reconstruct Europe first and bring peace and prosperity to the globe thereafter. The conversation revolves around the vital role of archives in setting up modern societies' public institutions, the concept of accountability through documentary evidence, the necessity of the archives being part of the entire lifecycle of a record, why metadata is everything and how to stay relevant within the orbit of a company's many priorities.
Carmen Hofmann (eabh) and Christoph Trebesch (Kiel Institute) talk about Sovereign Debt in the 21st century.
Trebesch argues that we see a continuous trend of debt crises without default, meaning that governments are less willing to default than in the previous centuries and therefore have established wider safety nets of bailouts and rescue lending.
This conversation circles around some of the most crucial questions of the post covid environment: Is there such thing as 'debt without drama' or is the worst yet to come? Can we find precedents in history for how to deal with current rising sovereign debt levels? Which role plays the rising finalisation of the economy, the increased dominance of litigation in finance and the rise of China? And who pays for these debt crises without default if creditors don't?
Carmen Hofmann (eabh) and Donato Masciandaro (Bocconi) talk about pandemic recession, central banking and a radical idea that reemerges whenever economic conditions become critical. Can we find a historical precedent for unprecedented monetary policies in 1630 Venice after all?
In this episode we discuss 700 years of interest rates.
Together with Paul Schmelzing (Harvard/Bank of England) we will find out why interest rates are continuously declining since the Middle Ages and why history is the perfect lab to study tail events. What kind of animal are interest rates? What drives long-term rates? And how is this trend a capital accumulation story equally relevant to monetary policy-makers and everyday investors?
Listen to the conversation and find out !
Hugo Bänziger (eabh) and Barry Eichengreen (Berkeley) look to the past and the future of the international monetary system.
15 August, 1971 marked the end of the Bretton Woods system, terminating the convertibility of the US dollar to gold. From this point onwards global exchange rates started to float freely and monetary institutions around the world were looking for new monetary anchors.
In this episode of the eabh Podcast we are asking: What was the Bretton Woods system? Why did it end? How did it go since 1971? And what comes next: Can we draw a comparison from Bretton Woods to Digital Central Bank Currencies (CBDC)?
Who finances the financiers?
Get to know Her Majesty's Treasury: Its 1000 years history, characterised by continuity and evolution; its relationship with the Bank of England and the important role it plays in a world after the Great Financial Crisis of 2008, which lies in the past, yet is present at many institutions' balance sheets. Carmen Hofmann (eabh) in conversation with Mario Pisani (HM Treasury).
Mario Pisani's full paper is available at: http://bankinghistory.org/wp-content/uploads/Who-finances-the-financiers.pdf
Carmen Hofmann (eabh) in conversation with Marie Laperdrix (Head of Archives and History at BNP Paribas).
In this episode we discover the apparent and the hidden treasures of one of Europe's most significant financial archives. The BNP company archive, Marie claims, holds invaluable information about our societies and contributes to the transparency of our democracies. The content of their collection ranges far beyond the 'usual' documentation of daily banking transactions, covering not only the history of the bank and the social history of France, but global history and the trajectory of entire nations, like for example Mexico, Morocco, or Norway.
We will further talk about the opportunities 2020/21 held for the archival professionals, our shared enthusiasm for open content formats and the importance of Marie Kondo inside and outside of the archive.
Where is financial history going?
Hugo Bänziger (eabh) and Harold James (Princeton) take a real long view on the field of financial history. Can we see an anticipation of what is happening now by looking much further to the past? Will we return through technology to an old form of finance where risk was much wider distributed than it is through today's banking system?
Fire in London
Carmen Hofmann, Secretary General of eabh, in conversation with Nathan Sussman, Graduate Institute Geneva. In this episode of the eabh podcast we talk about the Great Fire of London, the rebuilding of the City afterwards, the role of the Corporation of London and in more general terms financial innovations, revolutions and development.
Sources as mentioned in recording:
Nathan Sussman: 'Financial Developments in London in the 17th Century: The Financial Revolution Revisited'
D'Maris Coffmann, Judy Stephenson and Nathan Sussman: 'Financing the Rebuilding of the City of London after the Great Fire of 1666'
Carmen Hofmann, Secretary General of eabh, in conversation with Andrea Papadia, University of Bonn. In this episode of the eabh podcast we talk about the slave business, its connections with the financial industry and the case of Brazil.
Sources as mentioned in recording:González, Marshall, Nadir (2017). 'Start up Nation?' Slave Wealth and Entrepreneurship in Civl War Maryland'. Naidu (2020). 'American Slavery and Labour Market Power'. Legacies of British Slave Ownership Database Olmstead, Rhode (2017). 'Cotton, Slavery and the New History of Capitalism'. Palma, Papadia, Pereira and Weller (2021). 'Slavery and Development in 19th Century Brazil'.
Hugo Bänziger, former Chief Risk Officer at Deutsche Bank and Chairman of eabh in conversation with Torsten Wegner, a leader of Risk Dynamics at Mc Kinsey.
In this episode, our experts will talk about the development of financial risk management since Bretton Woods, its failures during the Great Financial Crises, how the industry has taken on the complexities of risk since 2008; and what finance could learn from the Apollo Space Mission to the moon... www.bankinghistory.org
Debts & Dictators
Carmen Hofmann, Secretary General of eabh in conversation with Tobias Straumann, University of Zürich. In this episode of Finance & History we are talking about financial crises, sovereign debt, the complexity of international frameworks and the rise of Hitler.
Straumann (2019). '1931: Debt, Crisis, and the Rise of Hitler'