The Lyon Stock Exchange: The Survival of the Fittest (1866-1914)

In this paper, we look back at the XIX century France to shed light on effect of competition in the stock exchange industry. During the XIX century the Paris financial centre plays a central role in the French financial markets. Nevertheless, six organized regional exchanges do exist along all the second half of the century. A recent literature started to study the complex functioning of the Paris financial centre as well as the interaction between its two components, the official Paris Bourse and its OTC rival, the Coulisse. Nevertheless, a very small literature is devoted to the regional French exchanges. By studying the interactions between Paris and Lyon, we find that, after the 1881-1882 boom and burst, the Lyon stock exchange has to struggle for surviving facing fierce competition from the Paris Bourse and main national banks particularly after the 1898 reorganisation of the Paris financial centre, while the strong activity of Coulisse before the 1895 gold mines crash had a positive effect on the Lyon one. After the 1898 reorganisation, the Lyon stock exchange survived thanks to a new listing policy favourable to SMEs and the development of second tiers market for both these unofficially traded SMEs and unlisted risky (mainly foreign) stocks. On the other side, the progressive homogenisation of the official market imposed by regulators to enhance their control over the French securities market acted as force driving trading to Paris: only the facilities the Lyon exchange gave to the main banks of the financial centre maintained some activity.