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Securitization of Sovereign Debt: Corporations as a Sovereign Debt Restructuring Mechanism in Britain, 1694-1750

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  • Stephen Quinn

    ()
    (Department of Economics, Texas Christian University)

Abstract

This 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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File URL: http://www.econ.tcu.edu/RePEc/tcu/wpaper/wp07-01.pdf
File Function: First version, 2008
Download Restriction: no

Bibliographic Info

Paper provided by Texas Christian University, Department of Economics in its series Working Papers with number 200701.

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Length: 43 pages
Date of creation: Mar 2008
Date of revision:
Handle: RePEc:tcu:wpaper:200701

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Web page: http://www.econ.tcu.edu/
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Related research

Keywords: economic history; Britain; banking;

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References

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  1. Bolton, Patrick & Jeanne, Olivier, 2005. "Structuring and Restructuring Sovereign Debt: The Role of Seniority," CEPR Discussion Papers 4901, C.E.P.R. Discussion Papers.
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  8. Haldane, Andrew G. & Penalver, Adrian & Saporta, Victoria & Shin, Hyun Song, 2005. "Analytics of sovereign debt restructuring," Journal of International Economics, Elsevier, vol. 65(2), pages 315-333, March.
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  14. Eichengreen, Barry & Mody, Ashoka, 2003. "Is Aggregation a Problem for Sovereign Debt Restructuring?," CEPR Discussion Papers 3771, C.E.P.R. Discussion Papers.
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  25. Marc Weidenmier, 2004. "Gunboats, Reputation, and Sovereign Repayment: Lessons from the Southern Confederacy," NBER Working Papers 10960, National Bureau of Economic Research, Inc.
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Cited by:
  1. 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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