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The life of veteran financial journalist Stan Strachan and his newspaper, the National Thrift News both traced the broader arc of the savings-and-loan industry from the mid-1970s through the early 1990s; the industry prospered due to a post-World War II housing boom but foundered in the mid-1970s as a result of regulatory strictures and rising inflation; federal deregulatory policies used to revive the industry backfired, triggering the collapse of thousands of thrifts. The roots of Strachan’s traditional journalistic training and idealization of U.S. society were central to his reputation for journalistic independence. He used his close contact with the industry to advance the newspaper’s journalism; insider knowledge allowed reporters to break important stories.

A personal and professional profile of millionaire developer and banker Charles H. Keating Jr., the public face of the savings-and-loan crisis, describes how he exploited a permissive business environment and the Reagan administration deregulatory trend in the 1980s to build his American Continental Corporation and Lincoln Savings and Loan empire. Keating and his career fit within the broader economic and cultural changes in the 1980s that celebrated materialism and excess. Keating’s complex character is examined; he was an accomplished athlete, a generous contributor to the Catholic Church, and a crusader against pornography. He was a moralist and yet he skirted the law numerous times, beginning with a federal securities fraud case in 1979 that he ultimately settled with regulators.

The National Thrift News first reported in September 1987 about the infamous Keating Five meeting where five U.S. Senators sought to weaken a regulatory examination of a troubled savings and loan owned by the politically powerful Charles Keating Jr. The newspaper’s coverage of this event, which became central to the cultural memory of the savings-and-loan crisis, initially was ignored by major media. It speaks to a broader failure of conventional business journalism, which is summarized here through a review of business journalism history and normative practices. A common thread in this criticism is business journalists’ lack of independence from the business and markets they cover. This chapter argues that the trade press performs a valuable surveillance function of industry.

This chapter examines the historical foundation of watchdog reporting in journalism and its application to business reporting; it argues that business journalists must watch over powerful corporations and alert society to potential threats. The press’s watchdog tradition should be examined through a new dimension for the trade press; it acts as an enforcer of normative behavior in a particular industry. Trade-press editors and reporters often are called the “conscience” of a given business as they report on people and companies that violate business ethics. In this fashion, trade journalists again serve a critical function in capitalism, helping markets self-regulate.

This chapter examines a legacy of problems that arise between journalists and the businesses they cover, a history that includes advertisers dictating and censoring stories, a cozy relationship that can form between reporters and corporate sources and a narrow focus on an elite audience. These conflicts date back to the emergence of the commercial advertising model in the mid-nineteenth century. Further, this chapter explores an important theoretical critique of news media and business and the political economy theory of mass communications, and it describes how the legacy does and does not apply to the National Thrift News. The newspaper used its industry ties as a reporting advantage, allowing it to navigate both roles as industry insider and as industry watchdog.

The history of financial markets is full of epic gains and colossal catastrophes that leave devastating financial hardship behind. Market abuse is one of the main causes of such market anomalies and of large-scale frauds. This book examines the mechanics of insider dealing and market manipulation and the rationales underlying their regulation. The book uses traditional legal analysis in the discussion of legal and regulatory rules dealing with market abuse. At the same time, it employs some of the assumptions of economic analysis to evaluate the effectiveness of market abuse regulations in the United Kingdom and the rest of the European Union (EU). The advent of the new European Community regulation for financial markets enables the researcher to deal with the EU regime for market abuse in a unitary fashion without engaging in a detailed study of applicable rules in each Member State.

This chapter uses the story of the Shanghai Mint as a lens to examine the financial history of China in the 1920s and early 1930s to show how familiar events occurred in economic history. It reviews political and economic changes within China that influenced monetary reform on the last silver frontier. It also talks about the construction of the mint, which started in 1921 and produced coins in the spring of 1933. The chapter refers to China's movement from the warlord period of the late 1910s and early 1920s to the Nationalist period wherein the new government inherited the goals of currency reform from its predecessors and the half-finished physical plant of the Shanghai Mint. It looks at the history of the mint that connects small technical details to much larger political and economic issues, such as the types of coining equipment to be used and the design of coins.

This chapter first takes into account the history of financial crises in America, citing financial crises as a regular and often debilitating feature of American life. The lack of a crisis for about 50 years, here, is attributed to the federal government’s active role in managing financial risk. This is a role which began to blossom in 1933 with the passage of the Glass-Steagall Act, which introduced federal deposit insurance, expanded federal supervision of banks, and separated commercial banking from investment banking. Critics of the Glass-Steagall Act, however, cited problems that could have arisen, such as the undermining of the nation’s financial system, or the encouragement of excessive risk taking or “moral hazard.” In the end, private financial institutions and markets cannot always be relied upon to manage risk effectively on their own. As a result, the best way to address the issue is through the identification and systematic regulation of significant financial institutions on an ongoing basis.

1720 is remembered in European history as the year of folly, when the financial markets ballooned and then collapsed in the capitals of England and France. The financial crisis was of great import to the subsequent history of both countries: England emerged from the crisis on the way to becoming an international financial powerhouse, whereas France failed to modernize its financial infrastructure, which collapsed during the French Revolution. Much less is known, however, outside the Netherlands about the third economy involved in the Bubble, namely, the proto-capitalist economy of the Dutch Republic. This chapter makes the case that the Dutch financial economy, which in 1720 was more advanced than that of its neighbours, bore the brunt of the crisis much better than they. The Bubble in the Dutch Republic channelled some of the country’s previously underused capital reserves back into the economy and allowed for the rise of a number of municipal Bubble companies, chiefly devoted to shipping and insurance. Several of these survived the Bubble and developed into bona fide businesses with surprising longevity. The foremost example of this is the Rotterdam insurance company which lasted until the twenty-first century and continues to exist as a philanthropic foundation.

The conclusion returns to the big questions that animate the book, drawing out what it tells about the timing, the operation, and the dynamics of the US securities markets. It argues that seeing the history of the US securities markets as inextricably rooted in the broader dynamics of the economic history of the United States suggests a different conception of financial history from the dominant one today. In addition, the book shows that the impact of political and other institutions on the evolution of US securities markets was strongly conditioned by the dynamics of the financial and productive sectors of the US economy. Finally, the book suggests that if we want to understand the economic role that securities markets play in the economy, it is essential that we understand them as they actually existed, rather than imagining them as they never were.

While the effect of financial crises on forming financial policy is well studied, less attention has been paid to how they produce ‘game changing’ turns that reinvent the context for regulatory reform, institutional design, and legitimate future conduct. The aftermath of crisis becomes an exercise in damage-limitation, but based on interpretation, debate, and narrative-building that creates a lasting memory of the crisis. We examine the contemporary perception and memory of the ‘Panic’ or ‘Founders Crisis’ of 1873 in the US and Germany, which had many common transatlantic origins. Yet the solutions could not have been more different because contemporaries created different narratives about this crisis. We highlight how the different language of legitimacy following the 1873 crisis reshaped long-term regulatory norms that discredited insiders in the US, yet encouraged committed, responsible insiders in Germany.

The deregulation of the financial system in France in the 1980s and the French commitment to the freedom of capital, as recently pointed out by Rawi Abdelal, is ‘quite curious’ and even doubly paradoxical: how to understand, first, that the financial liberalization has occurred while the left was in power? Second, how to explain that Colbertist France took the lead for financial deregulation at a world scale feeding the hypothesis of a so-called ‘Paris Consensus’? Based on the primary archives of the French Treasury and of the Banque of France this contribution aims to demonstrate that the financial deregulation in France is managed by the State in order to facilitate its increasing indebtedness on a globalizing money market.

The three chapters of Part III focus on Schumpeter's own financial ventures. To begin with, Chapter 8 is dedicated to the history of the Biedermann Joint Stock Bank, whose president Schumpeter was from its foundation in 1921 until 1924. Since credit played an outstanding role in his development theories, the Biedermann project must be considered the most essential part of Schumpeter's practical venture finance projects. While his banking activities have so far mainly been perceived as a speculative episode, here they are examined as a serious attempt to put his theoretical considerations of credit-based entrepreneurial development into practice. Despite his efforts, the project encountered severe economic turbulence in the spring of 1924. Its failure was due to unfavourable economic conditions, contradictory strategic orientations amongst the shareholder groups, and mistakes made by those in charge (including Schumpeter). New insights are revealed based on previously inaccessible documents from the Austrian State Archives and other so long neglected sources.

Founded in 1441, King’s College was one of Cambridge University’s wealthiest colleges, endowed with a vast agricultural portfolio. John Maynard Keynes was appointed bursar just after WWI and initiated a major reallocation to equities, an innovation at least as radical as the late 20th century commitment to illiquid assets by Harvard and Yale. Keynes initially pursued a market-timing approach to investment with mixed success and failed to anticipate the 1929 market crash. Thereafter, his switch to a patient buy-and-hold strategy allowed him to maintain his commitment to equities in the subsequent market slump, reflecting the natural advantages that accrue to long horizon investors. Keynes’ innovations in endowment asset management, implemented over a dynamic period of capital market development and economic turbulence remain of great relevance to modern investors emerging from the Great Recession.

In this chapter, the authors analyze the functioning of private capital markets in Holland in the late medieval period. They argue that in the absence of banks and state agencies involved in the supply of credit, entrepreneurs' access to credit was determined by two interrelated factors. The first was protection of property rights and the extent to which properties could be used as collateral. The second was interest rates for borrowing money at the time, as well as the obligations of such borrowing compared with the interest rates on risk-free investments. The chapter’s case study is the small town of Edam and its surrounding countryside, De Zeevang, during the fifteenth and sixteenth centuries. The authors show that many households (whether headed by men or women) owned financial assets and/or debts, and the degree of financial sophistication was relatively high.