London Bond Market

You can divide the fixed income securities that traded on the London Stock Exchange into three groups: the British Funds, Foreign Funds, and Corporate Bonds. The British Funds included debt issued by the British Government and stocks guaranteed by the British Government, such as the Bank of England stock, South Sea Stock and East India Company stock. During the 1700s, these funds represented over 90% of the trading on the London Stock Exchange. Because trading was so concentrated in these shares, GFD is able to offer daily data on all of these securities from 1692 on.

After the Napoleonic Wars, European nations began raising capital in London. As a result of the Napoleonic Wars, South American countries had gained their independence from Spain, and the prospect of investing in countries that provided silver to the world led to a flurry of government debt being issued in the early 1820s, a bubble in the mid-1820s and defaults in the late 1820s.

Global Financial Data follows the rise and fall of foreign government bonds during the 1820s, including the bonds of Poyais, a fictitious country that only existed in the mind of Gregor McGregor, but was used to defraud London investors of over £100,000.

The UK Stocks Database documents how the foreign government bond market grew in London throughout the 1800s. After the 1860s as capital became more available, yields began to fall, and the number of countries that listed bonds on the London Stock Exchange grew. Many corporations raised more capital through bonds than through shares. By the end of the 1800s, dozens of foreign government bonds listed on the London Stock Exchange as yields hit lows not to be reached again until the Financial Crisis of 2008.

The UKs coverage of both domestic and foreign government and corporate bonds provides analysts a unique opportunity to study the financial history of the past.