ABSTRACT
Anthropology and history bring different lenses to the study of financial markets. While anthropology focuses on understanding the market participants’ practices, history offers a window into the co-evolution of these practices and market institutions. This chapter uses the financial market setting to explore how historical analysis can enrich our understanding of the relationship between institutional memory and financial crises. Specifically, I compare and contrast the security structures in three markets for mortgage-backed securities (MBS) in the United States in the 1880s, 1900s, and 1970s to investigate whether the lessons learned in the first two markets shaped the structure of MBS securities in the third. My analysis suggests that the prior instances of MBS markets are informative about the antecedents of the 2008 crisis. I find that the security structures in the third market shared important similarities with those of the previous markets, particularly with regard to the mechanisms used to control the risks of investing in the securities. My analysis suggests that the participants in the third market did not learn from the experiences of the first two. Tracing the security design across the three markets sheds light on failure of institutional memory to constrain the re-emergence of financial instruments and crises associated with the instruments
