My son has a football (soccer) shirt that has Standard Chartered emblazoned on it. Standard Chartered was one of the most stable British-listed banks during the financial crisis. They also seemed to be paragons of corporate virtue in the messy world of British banks. Not any longer! Yesterday, US regulators claimed that Standard Chartered have for a decade or more run a 'rogue' unit that schemed with Iran's government to hide £160bn in illegal transactions (click here for BBC coverage). Its shares at one stage today were down 25%. Michael White has an interesting piece over at the Guardian on this story.
My colleague and former PhD student Gareth Campbell has created a website about the British Railway Mania - click here . This episode has been described by the Economist as probably the greatest bubble in human history. Gareth's website provides background on the Mania and posits some explanations for the 'bubble'. In his explanation of why the bubble happened, Gareth places a lot of emphasis on investor myopia regarding future dividends and uncalled capital. His study of investors during the episode does not support the view that this episode was fuelled by naive and irrational investors.