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How to regulate a financial market? The impact of the 1893-1898 regulatory reforms on the Paris Bourse

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  • Pierre-Cyrille Hautcoeur

    (EHESS - École des hautes études en sciences sociales, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Amir Rezaee

    (LEO - Laboratoire d'économie d'Orleans [2008-2011] - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique, EDHEC - EDHEC Business School - UCL - Université catholique de Lille)

  • Angelo Riva

    (IREBS - Institut de recherche de l'European Business School - EBS Paris - European Business School Paris, IDHE - Institutions et Dynamiques Historiques de l'Economie - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

Theoretical and historical experience suggests a financial centre may either include a single, consolidated and loosely regulated stock exchange attracting all intermediaries and actors, or a variety of exchanges going from strictly regulated to completely unregulated and adapted to the needs of different categories of intermediaries, investors and issuers. Choosing between these two solutions is uneasy because few substantial changes occur at this "meta-regulatory" level. The history of the Paris exchanges provides a good example, since two legal changes in opposite directions occurred in the late 19th century, when Paris was the second financial centre in the world. In 1893, a law threatened the existing two-exchanges equilibrium by diminishing the advantages of the more regulated exchange; in 1898, another law brought them back. We analyse the impact of these two changes on the competition between the exchanges in terms of securities listed, traded volumes and spreads. We conclude competition among exchanges is a delicate matter and efficiency is not always where one would think.

Suggested Citation

  • Pierre-Cyrille Hautcoeur & Amir Rezaee & Angelo Riva, 2010. "How to regulate a financial market? The impact of the 1893-1898 regulatory reforms on the Paris Bourse," PSE Working Papers halshs-00547470, HAL.
    • Handle: RePEc:hal:psewpa:halshs-00547470
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00547470v1
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    References listed on IDEAS

    as
    1. Pierre-Cyrille Hautcoeur & Angelo Riva, 2007. "The Paris financial market in the 19th century: an efficient multi-polar organization?," Working Papers halshs-00587812, HAL.
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    Cited by:

    1. Riva, Angelo & White, Eugene N., 2011. "Danger on the exchange: How counterparty risk was managed on the Paris exchange in the nineteenth century," Explorations in Economic History, Elsevier, vol. 48(4), pages 478-493.
    2. Paul Lagneau-Ymonet & Angelo Riva, 2018. "Trading forward: The Paris Bourse in the nineteenth century," Business History, Taylor & Francis Journals, vol. 60(2), pages 257-280, February.
    3. Jérémy Ducros & Angelo Riva, 2018. "The Lyon Stock Exchange: The Survival of the Fittest (1866-1914)," PSE Working Papers halshs-01800720, HAL.
    4. repec:dau:papers:123456789/5052 is not listed on IDEAS

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