In this edited volume, Laure Quennouëlle-Corre and Youssef Cassis bring together ten papers presented at an international conference held at the University of Geneva in October 2008 (which served as a pre-conference to the 15th World Economic History Congress in Utrecht the following year). The unifying theme of the ten papers is understanding the phenomenon of international financial centres in a comparative framework: what constitutes an international financial centre; what quantitative and qualitative criteria can be used to compare them with each other; and how best do we account for their rise and fall? In addressing these questions, Youssef Cassis builds on some of his earlier work, most notably his 2006 book on Capitals of Capital.Footnote ¹

‘Financial centres’ are often defined either by the presence of an important bourse or by a high concentration of banking activity (or both). Following from these rivalling concepts, the volume breaks down into five chapters predominantly concerned with stock exchanges (Michie on competition between stock exchanges in the twentieth century; Borodkin & Perelman, Hannah and Sylla on the pre-World War I stock exchanges of St Petersburg, London and New York, respectively; and Quennouëlle-Corre on the decline of the Paris bourse in the interwar period) and three chapters more strongly concerned with banking activity (Ugolini on Brussels, 1830–60; Straus on financial capitals – or the absence thereof – in Europe, 1945–62; and Schenk on Hong Kong, 1960–78). Two more chapters by Marichal (on the importance of Buenos Aires merchant bankers as intermediaries between the Argentine government and European banking houses during the great lending boom of the 1880s) and Racianu (on the stabilisation of the Romanian currency in the late 1920s and the role played by the Bank of France in this context) make interesting reading in themselves but are only tangential to the overall topic. In the following, we will focus on the four chapters dedicated to stock exchanges before World War I: they form a coherent whole and give the reader a good impression of what we know about bourses in this period and where future research might take us.

Ranald Michie's contribution on ‘Competition between stock exchanges in the 20th century’ is arguably the most interesting chapter. It questions the idea that there was significant competition between exchanges in the twentieth century, but leaves open the possibility that we could be entering a period in which the long-proclaimed ‘battle of the bourses’ might eventually materialise. The most interesting section relates to a detailed analysis of stock exchanges before World War I, for this is where we would expect competition between different stock exchanges most: Michie shows, for instance, that the number of cross-listings was low (e.g., London and Paris had only 16 cross-listed equities); and even where dual listings existed, this did not necessarily mean that bourses were rivals but rather that ownership was both split and mobile. Rather than competing with each other, stock markets developed particular strengths in some sector; Brussels, for instance, became the main trading floor for tramways, and Berlin attracted electrical companies. Such a ‘division of labour’ could even develop within one city if it boasted more than one stock exchange. Michie shows, for example, that the Paris Bourse (parquet) and the outside market (coulisse) complemented rather than competed with each other. This pre-1914 pattern of market segmentation was reinforced in the period until 1970 by foreign exchange restrictions and a smaller number of commonly held securities; a trend which was reversed only with the new wave of financial globalisation starting in the 1970s. While pointing out some successes in increasing competition (such as the 1986 Big Bang which attracted the trading of securities of large European companies to London), Michie remains cautious as to how far this process has gone so far and potentially can go in future. For him, the limited degree to which bourses can gain through aggressive competition is the driving force behind the recent wave of mergers between bourses; only this way they can increase their market share.

The contributions of Hannah (on the London Stock Exchange) and of Sylla (on the New York Stock Exchange) also make fascinating reading, partly because each contribution seems to be written against the other one. This introduces a comparative perspective which is required by the topic but is somewhat absent in many of the other chapters. Both chapters are concerned with stock market development on the eve of World War I. Hannah musters ample evidence demonstrating the unique position of the LSE. While acknowledging that Paris, Amsterdam and Brussels were stock exchanges with international reach (as opposed to New York, Berlin and Vienna which were more concerned with domestic finance), he points out the vast differences between London and the other three bourses. Moreover, he points out that conventional measures of stock market development such as stock market capitalisation over GDP cannot do justice to the LSE: why divide by British GDP, if the LSE possessed global reach? But if we were to confine such a measure to the UK, then how could we differentiate between national and international companies in the numerator? Such a distinction, Hannah argues convincingly, would have been alien to contemporaries: London's Stock Exchange Daily Official List classified companies by industry, not by country of operation or place of primary listing. Even if we wanted to impose a modern concept on the pre-1914 period, we would soon run into insurmountable problems: based on the activities of several leading companies listed at the LSE, Hannah shows that classifying a company as either domestic or international would often amount to an arbitrary choice.

Sylla's goal is different: he challenges the conventional wisdom that the US was rich but financially underdeveloped on the eve of World War I. He makes some adjustments he deems necessary to make the data truly comparative (some of which are harshly criticised by Hannah in his chapter). Sylla then goes on to argue that data for bank deposits over GDP and corporate bonds and stocks over GDP – two widely used measures for the level of financial development – show that it is difficult to portray the US as financially backward compared to the UK, France and Germany. Most of that financial development was of course centred in New York City, which allows Sylla to make another point. In his view, there was no interwar financial centre vacuum – Kindleberger's famous ‘no longer London but not yet New York’ – but New York took over directly from London after World War I.

Borodkin's and Perelman's objective again is different. They are concerned with the idiosyncracies of the St Petersburg case; the focus is on portraying the historical evidence as accurately as possible rather than interpreting well-known and long-studied facts in a comparative study. They break new ground in calculating a stock market index of 12 leading industrial companies quoted on the St Petersburg stock exchange for the period 1897–1914. This central pillar of their chapter is enriched by an interesting and most readable account of the early developments of the stock exchange from its early days in the eighteenth century to 1914. Any scholar wishing to do serious research on the St Petersburg stock exchange will find a good starting point in this contribution.

Taking the four chapters by Michie, Hannah, Sylla and Borodkin & Perelman together, the reader gets a fairly accurate impression of what we know – and what we do not yet know – about bourses in the pre-World War I period. It emerges very clearly that most of our knowledge is derived from some eight to ten stock exchanges located either in the core countries (London, Paris, New York, Berlin, Brussels and Amsterdam) or in the capital cities of the two ‘Eastern’ empires, namely St Petersburg and Vienna. Modern research still has a long way to go to shed more light on peripheral stock exchanges before World War I, but the interested reader can find a great deal of inspiration and state-of-the-art approach in this edited volume.