Finance has always been driven by incentives to innovate, speculate, evade, and reform. This timeline highlights the turning points that built and broke trust in money. From temples and coins to bubbles, frauds, and modern crypto collapses. Across centuries, the pattern repeats: invention lead to growth, misaligned incentives fuel excess, collapse destroys confidence, and new rules rise from the wreckage.
Temple Loans in Mesopotamia
Temples in ancient Mesopotamia begin acting as early banks. Priests lend out silver and grain that had been deposited for safekeeping by local people.
Read Banking Origins: Modern Lessons in Ancient Systems
Introduction of Coins
The kingdom of Lydia (in present-day Turkey) introduces the first standardized coins. These coins are used in trade and fundamentally transform how value is stored and exchanged.
China’s Paper Money
In the early 1100s, Song dynasty merchants use deposit shops to issue promissory notes to avoid carrying heavy piles of coins. By the 1120s, the government took control, creating a state monopoly and issuing the world’s first official paper currency, Jiao Zi. This marked the beginning of government-backed money and a new era in monetary history.
Read Fighting Fake Paper Money
Knights Templar Banking
The Knights Templar, a powerful order of warrior-monks, establish one of the first pan-European banking systems. They provide secure deposits, fund transfers, and safe passage for pilgrims traveling to the Holy Land. Their wealth and influence eventually provoke the jealousy of the king of France, leading to their sudden persecution.
Read Templar Banking: Religious Trust in a Financial Empire
The Medici Bank
Starting as money changers, the Medici family builds an international banking network, notably managing the finances of the Papal State. They transform banking into a tool of political power, using their financial success to become one of the most influential families in Renaissance Europe.
Read Medici Bank: International Bankers to the Pope
The South Sea Bubble
The British public is taken by speculative mania as the South Sea Company promises great profits from trade with South America. Fueled by misleading claims and government backing, share prices increased until the bubble burst. Thousands of investors, including members of Parliament, are financially ruined. Regarded as the first major international financial crash, it resulted in early forms of financial regulation and made the public more skeptical of too good to be true investments.
Black Friday: The Gold Market Crash
Wall Street speculators Jay Gould and Jim Fisk manipulate the US gold market by artificially driving prices high. Their actions cause widespread panic and extreme market volatility. When the US Treasury intervenes by releasing gold into the market, prices crash overnight, resulting in ordinary American investors losing fortunes. The scandal revealed the fragility of unregulated markets.
Charles Ponzi’s Scheme
Italian-born Charles Ponzi promises investors 50% returns in just 45 days from the trade of international postal coupons. In reality, he ends up paying earlier investors with the money from new ones. The scheme collapses and thousands lose their savings. The term “Ponzi scheme” is born.
Read Modern Pyramids: Financial Incentives Gone Wrong
Rise of Tax Havens
Rising post-World War I taxes across Europe send fortunes fleeing abroad. Switzerland and other tax-friendly countries seize the opportunity, offering financial secrecy for a fee. In 1934, Switzerland passes a law making it a crime to disclose client information, securing its position as a global financial hub.
Read Swiss Banking: End of an Era
Glass–Steagall Act
Following the Great Depression, the US enacts the Glass-Steagall Act to separate commercial and investment banking. It remained until its 1999 repeal, which has been linked to the 2008 financial crisis.
Enron’s House of Cards
Corporate greed peaks as Enron uses creative accounting and shell companies to hide debt and inflate profits. Employees lose their life savings.
Madoff and the $65 Billion Illusion
The reputable Bernie Madoff has been operating a Ponzi scheme for decades using investors’ own money. When his empire collapses, investors, charities, and families go bankrupt.
The Global Financial Crisis
Mortgage brokers, banks, and traders all profit by passing risk along to others, spreading the potential losses across the wider financial system. This misalignment of incentives where gains are privatized but losses are socialized nearly causes the collapse of the global financial system.
Dodd-Frank Whistleblower Law
After the financial crisis, the US reinforces the rewards offered to whistleblowers exposing securities fraud. These laws provide financial incentives leading to billion-dollar fines.
$104 Million IRS Whistleblower Award
Bradley Birkenfeld, a former banker, exposes how UBS helped wealthy Americans hide offshore accounts to evade taxes. His whistleblowing led to a landmark crackdown on banking secrecy and earned him the largest-ever IRS award of $104 million.
Read Whistleblowing: Why Incentives Matter
Paper Money Counterfeit Operation
Frank Bourassa is arrested for printing over $250 million in counterfeit US currency at a farm in Quebec. In exchange for revealing the remaining $200 million and his printing press, Bourassa served only six weeks in prison and avoided U.S. extradition. His operation remains the largest known by a single individual.
Read Fighting Fake Paper Money
Bitcoin’s Silk Road Bust
US authorities shut down the online black market Silk Road. The platform facilitated anonymous transactions using Bitcoin. This operation highlighted cryptocurrency’s appeal for illicit activities and started global debates on digital asset regulation and financial crime.
FATCA Exposes Tax Avoiders
Enacted in 2010 and effective from 2014, the US Foreign Account Tax Compliance Act requires banks worldwide to report Americans’ assets. Suddenly, trying to hide assets offshore becomes very difficult for US citizens. A wave of global tax transparency and cross border reporting regulations follows.
Wells Fargo Fake Accounts Scandal
Employees at Wells Fargo had been creating millions of fake bank accounts to hit aggressive sales targets. The bank is fined billions. This event triggers a wave of consumer protection reforms on sales incentives and bank oversight.
The Panama Papers Leak
A massive leak from Panamanian law firm Mossack Fonseca exposes offshore entities linked to politicians, celebrities, and criminals. These reveal widespread use of shell companies for tax evasion, corruption, and money laundering. Regulators and the public are increasingly questioning financial secrecy.
The Paradise Papers Leak
A massive legal data leak reveals the offshore financial dealings of global elites. It exposes legal tax avoidance and bringing the concept of “tax-friendly” locations into public debate. The focus is on aggressive legal tax optimization enabled by loopholes rather than outright illegal activity.
GameStop Short Squeeze
Retail investors band together to drive up GameStop stock in a short squeeze battle against hedge funds. Other investment firms join in to capitalize on hype. The event revealed the market-moving power of online communities and trend-chasing institutions, exposing cracks in traditional market mechanics.
Terra Luna Crypto Crash
The collapse of “algorithmic stablecoin” TerraUSD ($40 billion lost overnight) shakes trust in DeFi. Meant to stay equal to the dollar, it fell close to zero, triggering a wave of crypto bankruptcies.
Silicon Valley Bank Collapse
Silicon Valley Bank serving venture-backed tech startups, collapsed after losses on long-term bonds triggering a rapid run on deposits. Contagion fears followed as Signature Bank fails days later and First Republic Bank nearly closes. The largest US bank collapse since 2008, this was a reminder that banks remain vulnerable to sudden runs.
Credit Suisse Fails, Bought by UBS
Once a pillar of Swiss banking, Credit Suisse collapses under years of scandals, poor risk management, and market panic triggered by the Silicon Valley Bank failure. In a historic emergency deal backed by the Swiss government, rival UBS acquires Credit Suisse.
This timeline is far from over, with many more events still to come.
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