The Government of Markets
How Interwar Collaborations between the CBOT and the State Created Modern Futures Trading
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Beschreibung
Absent evidence to the contrary, it is usually assumed that US financial markets developed in spite of government attempts to regulate, and therefore laissez faire is the best approach for developing critically important and enduring market institutions. This book makes heavy use of extensive archival sources that are no longer publicly available to describe in detail the discussions inside the CBOT and the often private and confidential negotiations between industry leaders and government officials. This work suggests that, contrary to the accepted story, what we now know of as modern futures markets were heavily co-constructed through a meaningful long-term collaboration between a progressive CBOT leadership and an extremely knowledgeable and pragmatic US federal government. The industry leaders had a difficult time evolving the modern institutions in the face of powerful reactionary internal forces. Yet in the end the CBOT, by co-opting and cooperating with federal officials, led the exchange and Chicago markets in general to a near century of global dominance. On the federal government side, knowledgeable technocrats and inspired politicians led an information and analysis explosion while interacting with industry, both formally and informally, to craft better markets for all.
Absent evidence to the contrary, it is usually assumed that US financial markets developed in spite of government attempts to regulate, and therefore laissez faire is the best approach for developing critically important and enduring market institutions. This book makes heavy use of extensive archival sources that are no longer publicly available to describe in detail the discussions inside the CBOT and the often private and confidential negotiations between industry leaders and government officials. This work suggests that, contrary to the accepted story, what we now know of as modern futures markets were heavily co-constructed through a meaningful long-term collaboration between a progressive CBOT leadership and an extremely knowledgeable and pragmatic US federal government. The industry leaders had a difficult time evolving the modern institutions in the face of powerful reactionary internal forces. Yet in the end the CBOT, by co-opting and cooperating with federal officials, ledthe exchange and Chicago markets in general to a near century of global dominance. On the federal government side, knowledgeable technocrats and inspired politicians led an information and analysis explosion while interacting with industry, both formally and informally, to craft better markets for all.
Shows clearly through the eyes of insiders that in the interwar years government officials worked together with key industry leaders at the Chicago Board of Trade, the dominant futures exchange, to effect real change on the markets with institutions developed at this time thriving in the present day Provides important lessons for today’s industry and policy leaders caught in the current debate on how best to structure a post-crisis financial system Includes newly-organised and rarely-used archive of thousands of letters and telegrams (sometimes coded) between the major industry and key government actors over the entire interwar period (1920-1936)
Autor*in
Rasheed Saleuddin
Themen in »The Government of Markets«
Modern Futures Trading Financial Markets History of markets History of financial markets US interwar collaboration financial market innovation Regulation theory Financial markets government policy investments and securities
Stimmen zu »The Government of Markets«
“Using archival documents never meant to be public, Saleuddin tells how the ‘public good’ of government regulation and enforcement enhanced the ‘price discovery’ function of the Chicago market for commodity futures during the tumultuous price shocks of the Great Depression. The interactions between government regulators and the operators of the Chicago Board of Trade, the world’s leading market in commodity futures, show that central clearing-houses for financial derivatives may be able to monitor and control the growing hazards in today’s global financial markets – if they enlist the aid of enlightened and well-informed regulators.” (Larry D. Neal, Emeritus Professor of Economics, the University of Illinois at Urbana-Champaign, USA; and Research Associate of the National Bureau of Economic Research, USA)
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