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The Origination and Distribution of Money Market Instruments: Sterling Bills of Exchange during the First Globalization

Abstract : This paper presents a detailed analysis of how liquid money market instruments – sterling bills of exchange – were produced during the first globalisation. We rely on a unique data set that reports systematic information on all 23,493 bills re-discounted by the Bank of England in the year 1906. Using descriptive statistics and network analysis, we reconstruct the complete network of linkages between agents involved in the origination and distribution of these bills. Our analysis reveals the truly global dimension of the London bill market before the First World War and underscores the crucial role played by London intermediaries (acceptors and discounters) in overcoming information asymmetries between borrowers and lenders on this market. The complex industrial organisation of the London money market ensured that risky private debts could be transformed into extremely liquid and safe monetary instruments traded throughout the global financial system.
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https://hal-univ-tlse2.archives-ouvertes.fr/hal-03155017
Contributor : Stefano Ugolini <>
Submitted on : Monday, March 1, 2021 - 2:42:01 PM
Last modification on : Wednesday, June 9, 2021 - 10:00:16 AM
Long-term archiving on: : Sunday, May 30, 2021 - 8:11:18 PM

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Olivier Accominotti, Delio Lucena-Piquero, Stefano Ugolini. The Origination and Distribution of Money Market Instruments: Sterling Bills of Exchange during the First Globalization. The Economic History Review, Wiley, In press, ⟨10.1111/ehr.13049⟩. ⟨hal-03155017⟩

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