Book contents
- Frontmatter
- Contents
- List of contributors
- Foreword
- 1 Financial history: Lessons of the past for reformers of the present
- 2 The evolution of central banking
- 3 Free banking: The Scottish experience as a model for emerging economies
- 4 Regulation and bank stability: Canada and the United States, 1870–1980
- 5 Deposit insurance
- 6 Contingent liability in banking: Useful policy for developing countries?
- 7 Universal banking and the financing of industrial development
- 8 Before main banks: A selective historical overview of Japan's prewar financial system
- 9 Thrift deposit institutions in Europe and the United States
- 10 The development of industrial pensions in the United States during the twentieth century
- 11 The rise of securities markets: What can government do?
- Index
11 - The rise of securities markets: What can government do?
Published online by Cambridge University Press: 25 March 2010
- Frontmatter
- Contents
- List of contributors
- Foreword
- 1 Financial history: Lessons of the past for reformers of the present
- 2 The evolution of central banking
- 3 Free banking: The Scottish experience as a model for emerging economies
- 4 Regulation and bank stability: Canada and the United States, 1870–1980
- 5 Deposit insurance
- 6 Contingent liability in banking: Useful policy for developing countries?
- 7 Universal banking and the financing of industrial development
- 8 Before main banks: A selective historical overview of Japan's prewar financial system
- 9 Thrift deposit institutions in Europe and the United States
- 10 The development of industrial pensions in the United States during the twentieth century
- 11 The rise of securities markets: What can government do?
- Index
Summary
What role do securities markets play in economic development? How do they emerge in the development process? And how can regulation make them more effective? Like many a business school professor, I will use a case study to explore these issues. The case is the history of U.S. securities markets, a history that I believe is very relevant to policy makers and financial reformers concerned with developing countries today.
Some might doubt that lessons of financial history from the United States could be relevant to developing and transition economies. I would remind these doubters that two centuries ago the United States was a small and undeveloped country with serious financial problems. But it confronted those problems and creatively reformed its financial system, which then became a foundation of the U.S. economic infrastructure and a bulwark of the country's long-term growth. Several background papers – Smith and Sylla (1993), Sylla, Wilson, and Jones (1994), and Sylla and Smith (1995) – examine this history in great detail. Here I will mention only the most interesting points and add some additional evidence regarding the importance of foreign investment in U.S. history and the role of securities markets in promoting foreign investment.
Securities markets in U.S. history
Securities markets in the United States have a long history. The bond and stock markets date back to the first presidential term (1789–93) of George Washington. At that time, as will be discussed in more detail later, the debt hangover from the American Revolution was restructured, and shares of newly founded banks and other enterprises began actively to be traded.
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- Information
- Reforming Financial SystemsHistorical Implications for Policy, pp. 198 - 216Publisher: Cambridge University PressPrint publication year: 1997
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