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Securitization of Sovereign Debt: Corporations as a Sovereign Debt Restructuring Mechanism in Britain, 1694-1750

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  • Stephen Quinn

    (Department of Economics, Texas Christian University)

Abstract

This paper shows how Britain used privileged corporations to simultaneously securitize and restructure sovereign debt. Combining the sale of privileges with securitization allowed for multi-party acceptance of sovereign debt restructuring in an early emerging market country. As a result, the Bank of England, the South Sea Company, and the East India Company came to hold 80 percent of the British national debt by 1720. After 1720, Britain dismantled securitization and moved debt to a standard bond market.

Suggested Citation

  • Stephen Quinn, 2008. "Securitization of Sovereign Debt: Corporations as a Sovereign Debt Restructuring Mechanism in Britain, 1694-1750," Working Papers 200701, Texas Christian University, Department of Economics.
    • Handle: RePEc:tcu:wpaper:200701
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    File URL: http://www.econ.tcu.edu/RePEc/tcu/wpaper/wp07-01.pdf
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
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    Cited by:

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    2. Francois R. Velde, 2016. "What We Learn from a Sovereign Debt Restructuring in France in 1721," Economic Perspectives, Federal Reserve Bank of Chicago, issue 5, pages 1-17.
    3. Stefano Ugolini, 2018. "The Historical Evolution of Central Banking," Post-Print hal-01887004, HAL.
    4. Álvarez-Nogal, Carlos & Chamley, Christophe, 2016. "Philip Ii Against The Cortes And The Credit Freeze Of 1575-1577," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 34(3), pages 351-382, December.
    5. Pamfili Antipa & Christophe Chamley, 2019. "Regimes of Fiscal and Monetary Policy in England during the French Wars (1793-1821)," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-327, Boston University - Department of Economics.
    6. Kim, Jongchul, 2012. "How politics shaped modern banking in early modern England: Rethinking the nature of representative democracy, public debt, and modern banking," MPIfG Discussion Paper 12/11, Max Planck Institute for the Study of Societies.
    7. Soldatos Gerasimos T., 2018. "Property Rights on Credit and State Control of Money: The Irrelevance of the Origin of Money," The Economists' Voice, De Gruyter, vol. 15(1), pages 1-5, December.

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    More about this item

    Keywords

    economic history; Britain; banking;
    All these keywords.

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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