The Ascent of Money: A Financial History of the World: 10th Anniversary Edition

In the words of Bill Gross, who runs the world’s largest bond fund at the Pacific Investment Management Company (PIMCO), ‘bond markets have power because they’re the fundamental base for all markets. The cost of credit, the interest rate [on a benchmark bond], ultimately determines the value of stocks, homes, all asset classes.’

Credit and debt, in short, are among the essential building blocks of economic development, as vital to creating the wealth of nations

Securitization had produced the most toxic financial assets in the world – Fabrice Tourre was just one of an army of financial engineers manufacturing them – and had spread them far beyond the originating banks; revealingly, the near-total collapse of securitization in the course of 2008 was a key feature of the crisis.

Their source of profits lay in maximizing the difference between the costs of their liabilities and the earnings on their assets, without reducing reserves to such an extent that the bank became vulnerable to a run – a crisis of confidence in a bank’s ability to satisfy depositors, which leads to escalating withdrawals and ultimately bankruptcy: li

would be a mistake to assume that microfinance is the holy grail solution to the problem of global poverty, any more than is Hernando de Soto’s property rights prescription.

a) cashless intra-bank and interbank transactions b) fractional reserve banking and c) central bank monopolies on note issue, the very nature of money evolved in a profoundly important way.

The volume of derivatives – contracts derived from existing securities or transactions, such as interest rate swaps or credit default swaps (CDS) – has grown even faster, so that by the end of 2006 the notional value of all ‘over-the-counter’ derivatives (excluding those traded on public exchanges) was just over $400 trillion. Before the 1980s, suc

At Bretton Woods, in New Hampshire’s White Mountains, the soon-to-be-victorious Allies met in July 1944 to devise a new financial architecture for the post-war world. In this new order, trade would be progressively liberalized, but restrictions on capital movements would remain in place. Exchange rates would be fixed, as under the gold standard, bu

The financial crisis that struck the Western world in the summer of 2007 provided a timely reminder of one of the perennial truths of financial history. Sooner or later every bubble bursts. Sooner or later the bearish sellers outnumber the bullish buyers. Sooner or later greed turns to fear.