The Coevolution of Banks and Corporate Securities Markets: The Financing of Belgium’s Industrial Take-Off in the 1830s

Stefano Ugolini

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Abstract: Recent developments in the literature on financial architecture suggest that banks and markets not only coexist, but also coevolve in ways that are non-neutral from the viewpoint of optimality. This article aims to analyse the concrete mechanisms of this coevolution by focusing on a very relevant case study: Belgium (the first Continental country to industrialize) at the time of the very first emergence of a modern financial system (the 1830s). The article shows that intermediaries played a crucial role in developing secondary securities markets (as banks acted as securitizers), but market conditions also had a strong feedback on banks' balance sheets and activities (as banks also acted as market-makers for the securities they had issued). The findings suggest that not only structural, but also cyclical factors can be important determinants of changes in financial architecture.

Keywords: Universal banks; stock markets; corporate finance; financial development (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-fdg
Note: View the original document on HAL open archive server: https://hal.science/hal-02164060v1
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Published in Business History, 2021, 63 (6), pp.892-913. ⟨10.1080/00076791.2019.1621293⟩

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Working Paper: The Coevolution of Banks and Corporate Securities Markets: The Financing of Belgium's Industrial Take-Off in the 1830s (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02164060

DOI: 10.1080/00076791.2019.1621293

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