From the Age of Derivatives into the New Millennium: A Financial History of the United States 1970-2001

This book provides a comprehensive history of financial markets, from their growth in the 20th century to the emergence of the Internet economy in the 1990s.

Format: Hardback
Length: 452 pages
Publication date: 06 June 2022
Publisher: Taylor & Francis Ltd

Originally published in 2002, this comprehensive volume delves into a range of pivotal historical events, including the explosive growth of derivatives, the devastating impact of the savings and loan crisis, the frenzied merger mania of the 1980s, the accompanying insider trading scandals, and the relentless battle against inflation. The narrative then takes a retrospective look at the market's ascent in the 1990s, fueled by the burgeoning influence of the Internet economy as the third millennium dawned.

The growth of derivatives, a complex financial instrument, marked a significant milestone in the financial landscape. It allowed investors to hedge against risks and speculate on various asset classes, leading to increased market volatility and complexity. However, this growth was also accompanied by concerns about regulatory oversight and the potential for systemic risks.

The savings and loan crisis, which unfolded in the late 1980s and early 1990s, was a devastating blow to the American financial system. It was caused by a combination of factors, including high-interest rates, lax lending standards, and a lack of regulatory oversight. The crisis resulted in the collapse of thousands of savings and loan institutions, causing billions of dollars in losses to investors and depositors.

The merger mania of the 1980s was a reflection of the growing competition and consolidation in the financial industry. Companies sought to expand their market share and increase their profits by merging with other financial institutions. However, this trend was also accompanied by concerns about antitrust laws and the potential for creating monopolies.

Insider trading scandals, which emerged during the merger mania, involved the illegal use of confidential information to gain an unfair advantage in the stock market. These scandals exposed the flaws in the regulatory system and led to significant fines and penalties for those involved.

The battle with inflation, which has been a persistent economic challenge throughout history, was also a significant feature of the financial landscape in the late 20th century. Inflation erodes the purchasing power of money, making it more difficult for consumers to afford basic goods and services. Central banks and governments have implemented various policies to control inflation, including interest rate adjustments, fiscal policy, and monetary policy.

The market run-up in the 1990s was a remarkable period of economic growth and prosperity. The advent of the Internet economy, driven by the widespread adoption of technology and the growth of e-commerce, transformed the way businesses operated and created new opportunities for investors. The stock market experienced a historic bull run, with many companies achieving record-breaking valuations and investors experiencing significant gains.

However, the 1990s were also marked by a series of challenges and risks. The {URL-1} bubble, a speculative investment frenzy that peaked in the late 1990s, resulted in a significant loss of wealth for many investors. The collapse of several high-profile companies, such as Enron and {URL-2}, further highlighted the risks associated with the Internet economy.

In conclusion, the history of finance in the late 20th century was marked by a series of pivotal events that shaped the financial landscape we know today. From the growth of derivatives to the savings and loan crisis, the merger mania, the insider trading scandals, and the battle with inflation, these events have had a lasting impact on the global economy. While the 1990s were a period of remarkable growth and prosperity, they were also accompanied by risks and challenges that continue to shape the financial world. As we move into the future, it is important to learn from the past and build a more robust and sustainable financial system that can withstand the test of time.

Weight: 1040g
Dimension: 246 x 174 (mm)
ISBN-13: 9781032161143