Integrated markets 1890s style

A conversation yesterday about markets in the 1890s prompted me to dig out some data on government bond yields in the period.  The chart below shows a not-entirely-consistent (different maturity dates, period averages vs ends of periods) selection of data on bond yields for the UK, New Zealand, and New South Wales (Australia not existing as a political entity until 1901).  There are spreads between these yields, but recall that they were, on the one hand, the securities of the most powerful country (and a major net lender) and those of two small highly-indebted colonies.   The Australian colonies and NZ both went through episodes of financial crisis in the early 1890s (with severe and long-lasting effects in Australia’s case), and that presumably accounts for the spreads in the chart below widening temporarily in the early 1890s.

Rather more recent yield differentials will feature in a post probably next week (school holiday obligations permitting).

bonds

 

One thought on “Integrated markets 1890s style

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s