America’s first crash: 1792
Prepared by:
Abbasov Abbas
Galaburdina Zlata
Denisov Yaroslav
Novikova Maria
Romanskaya Polina
America’s first
crash: 1792
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Historical context of the crisis
Pattern of the crisis
Specific features of the crisis
Lessons learned from the crisis
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Historical context of the crisis
● Declaration of Independence (1776)
● Willing to create a state-of-the-art financial set-up
● Federal debt, pulling together individual states’ IOUs
● First BUS as an exciting investment opportunity (1791)
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Pattern of the crisis
Initial Public
Offering of the
BUS on July 4,
1791
Purchase of
government bonds
in open market by
authorities
First financial
bubble in US
history
Rumors of Duer’s
troubles. and
tightening of
credit by the BUS
Reaching maximum
prices for
government bonds
and scrips in the
winter of 1791-1792
Sharp market
decline and debt
defaults
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Specific features of the crisis
● Consequences of France’s crash in 1720
● America’s first bank bail-out:
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Public money for buying federal bonds
Cash for troubled lenders
New borrowing possibilities for banks with collateral
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Public futures trading was outlawed (1792)
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Lessons learnt
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Need to create a reliable financial system
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Financial bank support from the state
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New rules in trading
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Conclusion
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First precedent
Financial superpower
Brilliant Hamilton’s bail-out
Dependence of subsequent
crises on state support
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Sources
The slumps that shaped modern finance //
https://www.economist.com/news/essays/21600451-finance-not-merely-prone-crises-it-shaped-them-five
-historical-crises-show-how-aspects-today-s-fina
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