IDEAS home Printed from https://ideas.repec.org/h/pal/palscp/978-3-031-71810-6_5.html
   My bibliography  Save this book chapter

An Alternative Model of Trade Finance

In: The Capital Market of Manila and the Pacific Trade, 1668-1838

Author

Listed:
  • Juan José Rivas Moreno

    (European University Institute)

Abstract

The idiosyncratic model of the Pacific and the institutional scaffolding of Manila’s capital market, combined with the abundance of liquidity and the long distances involved in the trade, resulted in a specific approach to riskriskmitigation mitigation in the Pacific. As the financial centre of the line, Manila’s institutionsinstitutions were fundamental in internalising and distributing the risks associated with the trade, both in its Asian and American legs. The institutional structure provided solutions to the principal-agentprincipal-agent problem problem and the riskriskloss at sea of loss at sea, while the business model greatly mitigated the potential market riskriskmarket. Together with the canoncanon lawical-inspired financial vehicles and the role of lay confraternitieslay confraternities as financial intermediariesfinancial intermediaries, Manila managed to create the conditions through which individuals could pool their savings into trade finance. The continuous accumulation of proceeds and opening of new legacy fundslegacy funds quickly resulted in an increasing offer of working capitalcapitalworking for trade at a time when the business model of the Pacific crossing restricted its volume, leading to falling prices for capital and easing the specialisation of the city as a financial centre.

Suggested Citation

  • Juan José Rivas Moreno, 2024. "An Alternative Model of Trade Finance," Palgrave Studies in Economic History, in: The Capital Market of Manila and the Pacific Trade, 1668-1838, chapter 0, pages 157-191, Palgrave Macmillan.
    • Handle: RePEc:pal:palscp:978-3-031-71810-6_5
    DOI: 10.1007/978-3-031-71810-6_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palscp:978-3-031-71810-6_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.