The economic history helps you understand the present much better. For instance, you cannot realize why bank loans are a capitalization method more problematic than the risk capital, for startups, if you don’t know that the Dot Com Bubble and the 2007 Crisis have dramatically harshened the loaning conditions of the banks. Starting from this idea, I have made up a timeline of the setting up and development of stock exchanges. Assets started to be traded as far back as the Roman Empire, but after the Middle Age, economic innovations have precise dates.
- 1460: The First Stock Exchange in the World, in Anvers. It traded mostly bonds, but it was also a meeting place for those who lent money and officials.
- 1602: The First IPO (Initial Public Offering), for the Dutch company of East Indies. It was a megacorporation avant la lettre, specialized in maritime trading and transports with the East and Africa, an organization which also had military power.
- 1801: London Stock Exchange – LSE. The first share offering occurred there in 1825. Also at that time, there is recorded the occurrence of some abstract deeds, which made successive transfers possible, after for a long time practice had only allowed specific agreements between traders who had known each other.
- 1817: New York Stock Exchange, based on the model of the Philadelphia Stock Exchange, the first one founded in the USA. NYSE has been operated in the current building since 1865. The London and New York stock exchanges became in the first part of XIX century the main pillars of the international financial system. Currently, the New York Stock Exchange is the most powerful in the world, with a total capitalization of over $ 19 trillion and the NYSE composite index is considered the most relevant in the world, thanks to the quality of the companies considered and the huge volume of deals.
- 1878: Tokyo Stock Exchange, the core of what would become in 2013 Japan Exchange Group, further to successive mergers, of which the last one being with the Osaka Stock Exchange. The unofficial name is still the Tokyo Stock Exchange. It is worth mentioning the late date of founding, started in 1850, which is related with the accelerated modernization of the Nippon Empire. The Tokyo Stock Exchange, is the fourth most powerful in the world after New York, NASDAQ and London.
- 1891: Hong Kong Stock Exchange, operational under this name since 1914, after it had been founded in 1891 under the name of Association of Stockbrokers in Hong Kong, against the background of the prosperity related to the statute of enclave of the British Empire. The reputation of global financial center has remained unchanged after the transfer of sovereignty from the UK to China in 1997. Besides the volume of deals, the Hong Kong Stock Exchange distinguishes itself by a high number of IPO.
- 1929: The Crash on Wall Street. The most severe crisis in recent history started because of an excess of speculation of the assets. Due to the prosperity of the twenties, most stocks and other values were constantly appreciating, up to prices that proved unsustainable.
- 1971: NASDAQ, the first electronic stock exchange (National Association of Securities Dealers Automated Quotations). After launching, it has made its brokers unhappy as a result of the decrease in the margin between demand and supply, triggered by the electronic trading. The same decrease, however, has made the market more dynamic, because it has been in favor of the investors.
- 1990: Shanghai Stock Exchange. With a tradition going back to mid XIX century, the fifth most powerful stock exchange in the world ceased operations after the instatement of communism in China.
- 2000: Euronext, a pan-European stock exchange, created by the mergers of the stock exchanges in Amsterdam, Brussels and Paris, with operations in the three cities and in London, Lisbon and Dublin. After a complicated history of mergers and acquisitions, it has become the second most important stock exchange in Europe, after the one in London. It has a creative strategy, which encourages the financing of small and medium size companies, by operations called Alternext and Enternext.