Stringham, Edward (2002): The Emergence of the London Stock Exchange as a Self- Policing Club. Published in:
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In the early stock market in London there were substantial risks of non-payment and fraud. (Mortimer, 1801) According to Hobbesian theory, we would expect stock markets to develop only after government has implemented rules and regulations to eliminate these problems. The historical account, however, provides evidence that solutions to these problems did not come from the state. This article outlines the emergence of the London Stock Exchange, which was created by eighteenth century brokers who transformed coffeehouses into private clubs that created and enforced rules. Rather than relying on public regulation to enforce contracts and reduce fraud, brokers consciously found a way to solve their dilemmas by forming a self-policing club.
|Item Type:||MPRA Paper|
|Original Title:||The Emergence of the London Stock Exchange as a Self- Policing Club|
|Keywords:||financial history, self-governance, self-regulation|
|Subjects:||L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation
N - Economic History > N2 - Financial Markets and Institutions > N23 - Europe: Pre-1913
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation
|Depositing User:||Edward Peter Stringham|
|Date Deposited:||24. Sep 2010 16:03|
|Last Modified:||12. Feb 2013 13:08|
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