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The Evolutionary Chain of International Financial Centers

  • Michele Fratianni
Chapter

Abstract

Financial products are unstandardized and subject to a great deal of uncertainty. They tend to concentrate geographically because of the reduction in information costs resulting from close contacts. Concentration leads to economies of scale and encourages external economies. Great financial centers enjoy a high degree of persistence but are not immune from decline and eventual demise. Yet, their achievements are passed along in an evolutionary manner. In revisiting the historical record of seven international financial centers—Florence, Venice, Genoa, Antwerp, Amsterdam, London and New York—the paper finds evidence of a long evolutionary chain of banking and finance. As to the present and the future, the forces of integration are likely to give an additional boost to the persistence of international financial centers.

Keywords

Interest Rate Credit Risk Secondary Market Government Debt Financial Center 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgments

Author thanks an anonymous referee of the Department of Economics of the Università Politecnica delle Marche and Franco Spinelli for comments and suggestions on an earlier draft of this chapter.

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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Dipartimento di Economia, AnconaUniversità Politecnica delle MarcheItaly
  2. 2.Department of Business Economics & Public PolicyKelley School of Business, Indiana UniversityBloomingtonUSA

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