Archive for July 11th, 2018

How the Medici family created and lost their banking empire

July 11, 2018

Mike Colagrossi in Big Think has this piece on Medici banking history:

The Medici family had a long and powerful influence in European history for hundreds of years. They were well known for their banking prowess and are synonymous as an unparalleled patron of the arts during the Italian Renaissance. Early historical records point to some of the first Medici’s being active in political affairs starting in the 13th century.

But it wasn’t until the late 14th and 15th century that the family truly came to power with the creation of the Bank of Medici. Giovanni de’ Medici opened up one of the first family banks in 1397 in Florence,  the city which would become and remain a central hub for the family for the next four hundred years. Throughout the years they saw their fortunes grow and flounder through a variety of ventures.

From running one of the largest banks in Europe to shifting their fortunes to patronage and control of the papacy and other political posts, the Medici’s reign was a complex affair. This is how they rose to financial prominence because of their banking success and their eventual downfall. The family took their once great banking kingdom and dominance and turned it into a dynastic legacy that affected Europe and the world as we know it today.

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Erdogan expands clout over Turkey’s central bank

July 11, 2018

All kinds of things happening in Turkey with the new President taking control over the central bank as one of the things.

How your flip-flops reveal the dark side of globalisation?

July 11, 2018

Caroline Knowles Professor of Sociology at Univ of London in this piece tracks the making of flip-flops:

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Comparing financial integration in Britain and France (also 4 ways types of financial history)

July 11, 2018

I just came across this lecture series organised by State Bank of Pakistan (celebrating its 70 years) in the memory of Zahid Husain, the first Governor of the bank. Quite interesting set of speakers since 1975.

The sixth lecture was given by Prof Charles Kindleberger and needless to say it a is a superb read. Prof Kindleberger discusses how financial integration differed in Britain (where finance picked up) compared to France (where it remained limited to Paris).

He points to this interesting work by Charles Jones who said there are 4 ways to write financial history:

  • Orthodox: The problem through time is to curb the tendency to overissue banknotes or overlend.  So, you will ahve authorities rising from time to time to curb this tendency. This leads to rise of a central authority such as a central bank who monpolises banknotes and regulates the credit system.
  • Heroic: Starting a particular innovation or institution which leads to manifold rise in financial activity. Like the industrial banks in India or mortgage markets and so on.
  • Populist: Opposite of orthodox where there is opposition to this centralisation and support for financial activity outside the major centre. This is especially true in case of US where there was support for so called wildcat banking despite its flaws.
  • Statist: This holds that banks were created to serve the needs of the State/Government. Jones mentioned that central banks in Canada, Australia and Argentina fit in this category.

Prof Kindleberger adds that these histories do not remain static and one keeps moving from one form to another. For instance central banks in both England and France started for Statist reasons but then diverged. Bank of England became more orthodox as it tried to curb adventurous financial activity outside of London. Whereas in Paris, there were elements of both Orthodoxy and Populism.

Just fascinating way to categorise research on financial history. Even the whole discussion on financial history of Britain and France is worth a read..

 

 

Which Places Have the Highest Concentration of Billionaires?

July 11, 2018

Interesting chart by Jacob Funk Kirkegaard (PIIE) and Melina Kolb of PIIE:

 

Which Places Have the Highest Concentration of Billionaires?

Unsurprisingly, small enclaves catering specifically to the super rich, such as Monaco, St. Kitts and Nevis, Liechtenstein, and financial centers like Hong Kong, Switzerland, and Singapore top the list for most billionaires per capita. But Scandinavian countries Sweden, Iceland, Norway, and Denmark, despite having some of the lowest income inequality and highest income taxes, are also on the list, indicating that progressive welfare states do not inherently threaten the accumulation of great wealth among a small number of people. Large emerging markets often notorious for rapidly rising inequality, such as Russia, China, and Brazil, still have a relatively limited number of super rich per capita.

 


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