Prof. Jayanth R. Varma's Financial Markets Blog

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Prof. Jayanth R. Varma's Financial Markets Blog, A Blog on Financial Markets and Their Regulation

© Prof. Jayanth R. Varma
jrvarma@iima.ac.in

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Thu, 27 Jan 2011

Barings, Rothschild and Morgan

During the last three centuries, four investment banks have dominated global finance at one point or the other:

After World War II, no investment bank has dominated global finance in a way even remotely comparable to these four. (No, not even the “great vampire squid”). I used Google’s Books Ngram Viewer to see how common were references to these banks in the books of different countries at different points of time. I dropped Hope & Co. because it hardly registered in the graphs.

There are some limitations in the results. I entered “Rothschilds” in the plural to avoid picking up references to other people with this not uncommon German surname. But this means that I am not catching references to Nathan Rothschild for example. Morgan is an even more common surname, and I had to use JP Morgan to avoid contaminating the results. On the flip side, I am losing references to Pierpont Morgan or the House of Morgan. Finally, despite using a three-year smoothing in the graphs, publication of books on any of these banks leads to spikes which should not be taken too seriously. Also, the scale of the vertical axis is not the same across the graphs.

With all these limitations, the graphs below tell an interesting story. First, the books lagged behind the financial reality often by several decades, particularly in the earlier years. Second, high-profile (and sometimes quasi-political) events like the Barings’ involvement in the Louisiana purchase of 1803, or JP Morgan’s involvement in the panic of 1907, or Nick Leeson’s fraud at Barings in 1995 are reflected in a disproportionate coverage in the books (often after a lag).

Third (and most puzzling), Rothschild dominates British and German literature while JP Morgan dominates the French. I would think that the Rothschild branch in Paris was at least as important as the branches in London and Vienna. I am baffled by the surge in the coverage of JP Morgan in the French books well before the panic of 1907, and well before the surge of this American bank in American books.

Barings, Rothschild and Morgan in British English books 1700-2000
Graph of Barings Rothschild and Morgan in British books

Barings, Rothschild and Morgan in American English books 1700-2000
Graph of Barings Rothschild and Morgan in American books

Barings, Rothschild and Morgan in English books 1700-2000
Graph of Barings Rothschild and Morgan in English books

Barings, Rothschild and Morgan in French books 1700-2000
Graph of Barings Rothschild and Morgan in French books

Barings, Rothschild and Morgan in German books 1700-2000
Graph of Barings Rothschild and Morgan in German books

Posted at 14:38 on Thu, 27 Jan 2011     1 comments     permanent link

Comments...

vs wrote on Thu, 27 Jan 2011 16:43

Re: Barings, Rothschild and Morgan

The numbers in the y-axis for the french graph are approx 1/10 of that in the other graphs. I'm not sure what exactly the y-axis is but it seems like the french coverage of google books is not as good as german/english.

Perhaps, this has something to do with it: http://articles.latimes.com/2009/dec/19/world/la-fg-france-google19-2009dec19