Finance & History

How to regulate banks effectively?

Alexander Nützenadel (Humboldt University Berlin) makes a case for banking regulation being a cyclical affair. He and his colleagues started out to do the first quantitative analysis of banking supervision in the 20th century. Alexander and Carmen Hofmann (eabh) discuss his findings during what he calls the longest regulatory cycle in history (1930 -1970).

Are there lessons to be learned for today's regulators ? For instance how to deal with algorithmic trading or passive asset management?

Tune in to be informed!

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In this episode Maylis Avaro (Penn University) and Carmen Hofmann (eabh) discuss the international role of Sterling during the Bretton Woods era. Maylis claims that after 1945, the collective interests of the members of the sterling zone (stability of trade, free flow of capital, freer trade, access to London markets) were little compared to the cost of having UK authorities using the currency as a means of political domination.

Tune in and listen to a fascinating story of currency, empire & independence!

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Volker Berghahn (Columbia) & Carmen Hofmann (eabh) talk about European reconstruction after World War I, World War II and the Ukrainian War of today. Why was the reconstruction effort after 1945 so much more successful than the endeavours in the interwar years?

How should global aid be given? Does private or public money serve the matter better? Which should come first? Loans or grants? Do we need peace to rebuild? Who should guarantee for the money given? Who will profit? Volker and Carmen discuss these questions and try to look closely at the roadmap history could provide for Ukrainian reconstruction in the future.

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A practitioner's perspective with Edgar Walk (Metzler Bank) and Carmen Hofmann (eabh).

How can history insight help to bridge the gap between mathematical economic theory models and the 'real world of finance'? Edgar shares his insights from more than 20 years at one of the world's oldest private banks. How can history serve as a framework to identify financial and political cycles? How can it help to build a framework to see risks clearly and take sound long-term investment decisions? Listen up to get financial history insight!

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Stein Berre (New York Fed) & Paul Kosmetatos (University of Edinburgh) talk to Carmen Hofmann (eabh) about the first global credit crisis (1772/73). Which role did innovative financial products play? How did financial contagion propagate the initial shock and in which way did authorities intervene to stabilise markets?

Interestingly enough, the events 200 years ago resulted in a larger role of central banks within the architecture of finance. These state institutions then used certain stabilisation techniques that are still in place today. What is it that defines their success?

This episode is about one of the oldest banks in Europe. Alex Cooper (Leicester University) and Carmen Hofmann (eabh) discuss the financial needs of an island society and how banks are an integral part of local communities' fabric. In the case of Sicily, the creation of its own issuing bank was crucial for both; access to London capital markets and independence from British governance. Listen to hear why money always circulates!

This episode tells the story of the rise and fall of the Mississippi Bubble (1720) in Saint Domingue (Haiti). Malick Ghachem (MIT) discusses with Carmen Hofmann (eabh)why money seems not to be working for Haiti today and how he sees the roots of the country's financial malfunction in its past. Listen to learn how Haiti's struggle for independence is connected to the debt crisis of Louis XIV and the invention of paper money in France.

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How shall companies confront a difficult past?

In the most transparent way. So say Mike Anson (Bank of England) and Michael Bennett (Sheffield University) in conversation with Carmen Hofmann (eabh).

The topic of this episode is the collection of slavery compensation (1835 -43); after slavery was abolished within the British Empire in 1833. Part of a compromise that helped secure abolition was a compensation package for British slave owners for the loss of their ‘property’. The Bank of England administered the payment of slavery compensation on behalf of the British government.

Listen to Mike & Michael showcase the Bank of England archive and shed new light on the matter.

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With Ghassan Moazzin (University of Hong Kong), Carmen Hofmann (eabh) talks about the integration of China into the world economy in the late 19th century. It's the time towards the end of the Imperial period in China. Did foreign actors impose Western capitalism or merely fill an ever growing institutional void and need for capital to finance reform and build critical infrastructure? Listen to Ghassan explain why the truth is likely to be found in the nuance of history. And what he thinks of China coming full circle with the Belt and Road Initiative...

Are real sector bailouts good public policy in crisis?

In early 1932, President Hoover created the Reconstruction Finance Corporation during the depth of the Great Depression. The objective was to protect the credit structure and stimulate employment. The loans given were below market interest rates; hence qualified as bailouts. Gertjan argues that these bailouts benefited existing employees and bondholders, but did they meet the goal of keeping credit flows alive? In this episode, we discuss the new deal railroad assistance and its implications for today: Are real sector bailouts good public policy in crisis? 

Gertjan Verdickt (KU Leuven) in conversation with Carmen Hofmann (eabh)

Founded in 1674, Bankhaus Metzler is one of the oldest continuously family owned financial businesses in the world. This longstanding independence gave the bank and its customers many opportunities to make money. The bank proved the soundness of its business during several difficult periods in history, like the German hyperinflation after the Great War. The following period of National socialist rule in Germany (1933-1945), was undoubtedly one of the more difficult chapters of the bank's history.

Andrea Schneider Braunberger (GUG) wrote a book about the bank's business during that time. With uncensored access to newly available primary archival sources, she took a very close look. Here she talks to Carmen Hofmann (eabh) about the challenges and opportunities for businesses to confront a potentially difficult past. 

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).

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. 

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Broken promises? 

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.

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 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.

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. 

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.

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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.

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.

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. 

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. 

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)? 

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?

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'

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