Letter from the CEO

It is with great pleasure that we release this, our Quarter 2 journal for 2019. We are living in a fascinating time in history, in which we are bearing witness to a resurgence of right-wing politics, trade wars and nationalism. We believe that one of the factors that has influenced this phenomenon is a strong reactionary response to the 2007/2008 financial crisis. Many have questioned how it is that the financial industry could have found itself in such a dire situation. The populist response to the crisis has been to rein in the freedom of the banks, however, the truth is that this politically-charged reaction is largely misaligned with the complexities of our current socio-economic environment. It is only through a nuanced understanding of the events that led us here that we can begin to respond to the forces shaping our world at present.

We believe that the pastiche of stories contained in this journal constitute something of a short history of banking over the past 120 years that will provide some important insights on this topic. We cover developments such as the creation of double-entry accounting and the origins of financial mathematics, together with seminal events in financial history, including the Panic of 1907 and the creation of the US Federal Reserve, the establishment of the Bank for International Settlements, the Crash of 1929 and the Great Depression, and the OPEC Oil Crisis of 1973. These events are positioned alongside a reflection on the evolution of banking regulation through the creation and failure of legislation such as the Glass-Steagall Act and the Bretton-Woods Agreement. We also consider the stories of financial disaster – brought about by the actions of individuals, organisations and entire financial systems – that are scattered throughout the past century, from the failure of institutions such as Barings Bank and Long Term Capital Management, to the story of Dick Fuld and Lehman Brothers.

We hope that you enjoy this issue of the Monocle Quarterly Journal, which is more focused on the topic of banking than any of our previous issues have been. Given the place in which we find ourselves socially, politically and economically at present, we felt that it was high time to cover the fascinating history of this industry.

David Buckham
Chief Executive Officer

Monocle Quarterly Journal Articles

May 13
In the sixth issue of the Monocle Quarterly Journal, we felt it was high time to finally delve into the fascinating history of an industry that we consult with closely – banking. In what we have calle...
May 12
In today’s financial system, double-entry bookkeeping is the cornerstone of accounting, as the measure of the exactitude and truthfulness of financial accounts. The accuracy of these accounts is criti...
May 11
Long before Adam Smith wrote his magnum opus, The Wealth of Nations (1776), capitalism was alive and well in the United Provinces of the Dutch Republic. This was the Dutch Golden Age, the time of Remb...
May 10
On the eve of 19 October 1907, financier J.P. Morgan – then in his seventies – was compelled to abandon his plans for a quiet cigar on the porch of the house he had rented in Richmond, Virginia, and r...
May 9
Like most Swiss cities, Basel’s landscapes are postcard picturesque. Situated in the northwest of the country, nestled neatly along the banks of the Rhine, it is the third largest city in Switzerland,...
May 8
In the Spring of 1937, at the train station of the small town of Elizabeth, New Jersey, a man paced nervously on the platform. From a half-mile away, Roy Humphrey and his fellow commuters could hear t...
May 7
During his presidential campaign in 2016, US President Donald Trump voiced support for the promulgation of a 21st century version of a Depression-era law known as the Glass-Steagall Act, which would o...
May 6
At six foot seven inches, Paul Volcker commands the attention of any room. Yet as a young man, his preschool teacher was worried about his distinct lack of self-confidence. Later in life, however, it ...
May 5
The beginnings of the use of oil in America can be traced back to the Seneca tribe – part of the indigenous Native American Iroquois nation – who had found that the oil that seeped up from the earth i...
May 4
In 1955, Paul Samuelson – then a Professor of Economics at MIT – received a strange postcard from his colleague, Leonard Jimmie Savage – a mathematician and statistician at the University of Chicago. ...
May 3
Robert Citron was far from anyone’s idea of a typical financier. He did not own any well-tailored suits and he avoided visiting New York. He wore turquoise Navajo jewellery and scribbled endless notes...
May 2
In a newsroom in 1995, Business Week journalists eagerly scanned sealed court documents that included transcriptions of several scandalous conversations between employees of Bankers Trust – then a wel...
May 1
At 5:46 am on the morning of 17 January 1995, most people in Japan were probably lying in their beds, savouring the last few minutes of sleep before their alarms rang out through the stillness of the ...
April 30
From 1994 until 1998, the most exciting hedge fund in the world was undoubtedly Long Term Capital Management (LTCM). It appeared out of nowhere and in less than three years it had over $100 billion i...
April 29
In August 2013, President Barack Obama visited the Desert Vista High School in Phoenix, Arizona. It was around five years after the housing market collapsed in the US, with Phoenix being right at the ...
April 28
In 1969, the same year that senior partner Robert Lehman died, Richard Severin Fuld Jr. joined Lehman Brothers as an intern. Starting out trading commercial paper, Fuld progressed in his career and ea...
April 27
Iceland remained largely uninhabited until the late 9th century, when Viking explorers settled in the area. By 930, the settlers had already established a formal government through the alþingi (anglic...
April 26
It was just two weeks before Christmas of 2012 when Tom Hayes heard a loud knock on his door. He had only just recently moved back to England, into the leafy suburbs of Woldingham, in Surrey, and marr...
April 25
“Call me Ishmael” is the famous opening line to the great American novel Moby Dick. Written in 1851 by Herman Melville, the story is a cautionary tale that focuses on the vengeful Captain Ahab, skippe...
April 24
In considering some of the stories that make up the history of banking, we hope to provide some insight into the different forces that shape the interconnected worlds of economics, politics and financ...
 
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