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The coevolution of banks and corporate securities markets: The financing of Belgium’s industrial take-off in the 1830s

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  • Stefano Ugolini

Abstract

Recent developments in the literature on financial architecture suggest that banks and markets not only coexist, but also coevolve in ways that are non-neutral from the viewpoint of optimality. This article aims to analyse the concrete mechanisms of this coevolution by focussing on a very relevant case study: Belgium (the first Continental country to industrialise) at the time of the very first emergence of a modern financial system (the 1830s). The article shows that intermediaries played a crucial role in developing secondary securities markets (as banks acted as securitisers), but market conditions also had a strong feedback on banks’ balance sheets and activities (as banks also acted as market-makers for the securities they had issued). The findings suggest that not only structural, but also cyclical factors can be important determinants of changes in financial architecture.

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  • Stefano Ugolini, 2021. "The coevolution of banks and corporate securities markets: The financing of Belgium’s industrial take-off in the 1830s," Business History, Taylor & Francis Journals, vol. 63(6), pages 892-913, August.
    • Handle: RePEc:taf:bushst:v:63:y:2021:i:6:p:892-913
    DOI: 10.1080/00076791.2019.1621293
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