Stock markets have their origin in the 17th century. Since then, the weight of the stock market in the economy has been growing until reaching more than one hundred operating stock exchanges.
It can be said that the bags are the result of the different commercial exchanges that took place throughout history. Some civilizations such as Greece and Rome already applied regulated hours for commercial transactions.
Even in the markets of the Middle Ages are the first antecedents of the bags. This growing trade would continue, bringing with it the figure of moneylenders.
Not long after, banking underwent an important development between the twelfth and fourteenth centuries, with northern Italy, Antwerp and Bruges becoming the main financial centers.
It was precisely at the fairs that took place in the city of Bruges that the term bag emerged. And it is that these fairs took place in the fourteenth century before the residence of a notable businessman known as the Knight of the Bags.
The first steps of the stock market
Although the first stock exchanges took place in Antwerp in 1531, it should be noted that the first official stock exchange was that of Amsterdam, which dates back to 1602. Thus, that same year the first listed company appeared, which was the Dutch Company of the East Indies.
Shares in the Dutch East India Company could only be sold on the Amsterdam Stock Exchange. All this would bring speculative problems and give rise to the tulip crisis, the first economic bubble in modern history.
As the years went by, a technical terminology for trading on the stock market developed. That is why there was talk of “bull” to indicate those markets with upward trends or that “bear” was called to the downward markets.
The speculation that took place on the stock exchanges required some regulation. Therefore, in 1724 the first Stock Exchange Law was implemented.
Slowly, stock markets gained in importance and were established in other countries. Proof of this are stock exchanges such as those in Paris (1724), Vienna (1771), Philadelphia (1790), New York (1792) and London (1801).
The 19th century and the 20th century
Precisely the appearance of the stock market made possible the growth and expansion of companies with large capital needs. All this happened during the Industrial Revolution, when industrial companies experienced a great development thanks to the stock markets.
Despite the fact that for much of the 19th century London was the financial center of the world, the New York Stock Exchange grew in importance until it surpassed even the British capital’s stock market.
Undoubtedly, the outstanding economic expansion of the United States after the Civil War favored the appearance of large companies and, with it, a great growth of the New York Stock Exchange. This is how Wall Street became the great world reference market.
But not all were idylls in the bag. A clear example is the crash of 29 and the subsequent Great Depression. It was here that humanity suffered the consequences of movements in the stock markets.
Trying to cushion the impact of financial market activity on national economies, states came to play an increasingly important role. In this way, the thesis of the British economist John Maynard Keynes prevailed.
However, as the 20th century progressed, neoliberal ideas advocated a reduction in the role of the state in the economy and enhanced freedom of action in financial markets. In this sense, it is worth highlighting the measures implemented by US President Ronald Reagan and by British Prime Minister Margaret Thatcher, who opted to promote the role of stock markets.
But the stock market has not only been a place for traditional industrial companies. New technologies have seen in the financial markets an opportunity to capture the resources they need. Thus, indices have emerged with a large presence of technology companies such as the Nasdaq, while the stock market was democratizing and becoming more accessible for private investment.