 The Crash of 1882 and the Bailout of the Paris BourseEugene White () Cliometrica, Journal of Historical Economics and Econometric History, 2007, vol. 1, issue 2, 115-144 Abstract: The crash of the French stock market in 1882 presented the Paris Bourse with its worst crisis of the nineteenth century. Its structure was similar in key respects to today’s futures markets, with a dominant forward market leading the Bourse to adopt a common fund to guarantee transactions and liquidity. While this mutualization of risk protects clients and brokers from idiosyncratic shocks, it is generally assumed that it also provides considerable protection against systemic shocks, as no twentieth century exchange has been forced to shut down. Using new archival data, this paper shows how a stock market crash overwhelmed the Bourse’s common fund. Only an emergency loan from the Bank of France, intermediated by the largest banks, prevented a closure of the Bourse. Keywords: Stock market crash; Microstructure; Mutualization of risk; Bailout (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:afc:cliome:v:1:y:2007:i:2:p:115-144 Access Statistics for this article Cliometrica, Journal of Historical Economics and Econometric History is currently edited by Claude Diebolt, Dora Costa and Jean-Luc Demeulemeester More articles in Cliometrica, Journal of Historical Economics and Econometric History from Association Française de Cliométrie (AFC) Contact information at EDIRC. |
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