Introduction

It is common, for both IPE scholars and other commentators, to trace the origins of modern-day finance to the globalization trends of the 1970s, when the Bretton Woods system broke down and financial markets began to globalize. The assumption that typically accompanies such interpretations is that late-twentieth-century finance represents a reemergence of the financial relations and principles that had prevailed during the late nineteenth and early twentieth centuries under British hegemony. Such perspectives, however, fail to recognize the extent to which the nature of present-day global finance has been shaped by institutional forms of distinctly American provenance. This chapter begins to trace the emergence of the institutional forms that would stamp the twentieth-century development of American finance and that would come to shape the character of financial globalization during the late twentieth century. It gives an account of financial transformations during the postbellum era, outlining the processes through which a new pattern of financial intermediation emerged that differed in crucial respects from the British financial model.