Securitization of Sovereign Debt: Corporations as a Sovereign Debt Restructuring Mechanism in Britain, 1694-1750
AbstractThis paper shows how Britain used privileged corporations to simultaneously securitize and restructure sovereign debt. Combining the sale of privileges with securitization allowed for multi-party acceptance of sovereign debt restructuring in an early emerging market country. As a result, the Bank of England, the South Sea Company, and the East India Company came to hold 80 percent of the British national debt by 1720. After 1720, Britain dismantled securitization and moved debt to a standard bond market.
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Bibliographic InfoPaper provided by Texas Christian University, Department of Economics in its series Working Papers with number 200701.
Length: 43 pages
Date of creation: Mar 2008
Date of revision:
economic history; Britain; banking;
Find related papers by JEL classification:
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
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- Kim, Jongchul, 2012. "How politics shaped modern banking in early modern England: Rethinking the nature of representative democracy, public debt, and modern banking," MPIfG Discussion Paper 12/11, Max Planck Institute for the Study of Societies.
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