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A portrait of a banking calamity

Written by Searching Finance Thursday, 14 March 2013 19:32
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H/T D'Maris Coffman

 

For many years Paul Kosmetatos worked in the City of London’s financial sector, where he became fascinated by the unfolding of periodic crises.  Today he’s doing a PhD at Cambridge University, looking at the events surrounding the banking panic of 1772. 

 

The spectre of financial crisis looms particularly large at present. My interest in the collapse of banking systems dates back more than a decade to my experience of working in the City. In just 12 years I have witnessed three major market wobbles: the Russian crisis of 1998, the dotcom bubble of 1999-2000, and the current credit crunch. For my PhD research in the Faculty of History, however, I have chosen to focus on an episode that took place almost two and a half centuries ago.

 

One rascally and extravagant banker has brought Britannia, Queen of the Indies, to the precipice of bankruptcy! It is very true, and Fordyce is the name of the caitiff. He has broken half the bankers. (Horace Walpole, 22 June 1772)


With the benefit of hindsight, the pronouncement by the Georgian author and politician Horace Walpole may seem overly dramatic, particularly as most people today have never even heard of the Panic of 1772. At the time, this crisis was a major shock to British finance. The storm was unleashed in early June 1772 with the failure of the banker Alexander Fordyce, a former Aberdonian hosier whose daring speculations had brought him great wealth, an aristocratic marriage and almost a Parliamentary seat. Soon the panic in London was universal, as the Scots Magazine reported ...

 

To find out what Scots Magazine reported, click the link below

 

http://www.cam.ac.uk/research/discussion/a-portrait-of-a-banking-calamity

Last modified on Thursday, 14 March 2013 19:58

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