The New York Stock Exchange is one of the oldest in the world. History of the New York Stock Exchange

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

New York is one of the twenty most influential and largest cities in the world. The degree of development of this metropolis can be judged by the standard of living, population density, as well as the huge impact on the financial markets around the world. New York is the oldest and largest financial center of the foreign exchange market in North America. It houses the world's largest and the main US stock exchange NYSE, which is rightfully considered a symbol of the financial power of the United States of America.

Prerequisites for the creation of the NYSE

Until the end of the 18th century, the profession of a broker as such did not exist. The businessmen of that time were more interested in commodity transactions than in securities. The buying and selling operations took place on the premises of hotels and coffee shops located along Wall Street. Securities speculation (CS) became the leading activity of brokers only after bonds guaranteed by the US government were issued on the market in 1790. Dealers interested in the commodity and brokers selling securities began to separate their activities. Most often paper transactionstook place under a plane tree that grew on Wall Street, near the house number 68. Auctioneers and dealers sought to monopolize all transactions for the sale of securities, inflated commissions, as a result of which all transactions for the purchase and sale of bonds and shares guaranteed by the state became unprofitable.

Start NYSE

The first attempt to turn things around was a meeting of top brokers in the lobby of Corre's Hotel. In the end, on May 17, 1792, the most respected brokers signed the famous "Agreement under the Plane Tree". The text of the agreement was short, the goals were transparent. In the initial trades, deals were made on three types of state-owned securities and on the shares of two banks. Brokers were allowed to sell securities only to each other, with commissions amounting to a fixed 0.25% of the value of the transaction. This agreement was the birth certificate of the New York Stock Exchange.

NYSE Building

At the beginning of their work, brokers rented a room for two hundred dollars. This is the first building occupied by the New York Stock Exchange. The address of this financial organization was listed as Wall Street, 40. In the 19th century, the stock exchange burned down several times, changed its address. For two centuries, its profits increased so much that in 1903 the administration was able to design and build the exchange building. The architect was George Post. The original NYSE building was a Greek temple-like house with an ornate pediment and six columns on the façade. The total amount of work amounted to $ 4 million. Later, 22 more floors were added, which housed new retailthe platform of a financial mechanism that New York is proud of. The stock exchange, whose address is Wall Street 11, is known to any American and visitor to the city. The building performed its functions until 1978. After that, the New York Stock Exchange NYSE moved to other addresses, and the building itself became a US national treasure.

An interesting story of the appearance of the national flag on the main pediment of the stock exchange building. Due to the onset of the Great Depression, many bankrupt stockholders committed suicide by throwing themselves from building windows. After that, the administration installed iron bars on the windows. So that a solid financial institution would not look like a prison, it was decided to close these bars with the US national flag.

The NYSE building is currently closed to the public, but New Yorkers are happy to take pictures of the old building at the intersection of Broad Street and Wall Street, which housed the New York Stock Exchange. The photo of this house is known to tourists from all over the world.

NYSE in the 20th century

During its existence, the New York Stock Exchange has experienced many ups and downs. Several times trading on it was suspended, for example, in October 1929 due to the beginning of the "Great Depression" in October 1987, when the Dow Jones index experienced its deepest fall. October 2012 was also unsuccessful, when the exchange stopped its work due to the approach of Hurricane Sandy. Currently, its activities are regulated and controlled by a special body -State Securities and Exchange Commission. It was the New York Stock Exchange that developed and implemented the Dow Jones Index, which is the most important parameter of the Central Bank quote.

NYSE Today

Since 1975, the New York Stock Exchange has received the status of a non-profit organization, the assets of which were owned by 1366 individuals. Places on the stock exchange could be bought and sold. To date, the cost of a member of this corporation is about $ 3 million. The youngest broker in the history of the exchange is thirty-year-old William J. O'Neill. It was he who created the daily database of the US Central Bank. This happened in the 60s of the twentieth century.

The New York Stock Exchange differs from other exchanges in that it is very picky about companies that present their securities for transactions. These firms must comply with the listing conditions. These conditions are among the most severe among other stock exchanges in the world. Listed companies are considered the most reliable. The NYSE currently lists 2,800 world-class companies, of which only 450 are registered outside the US. In brokerage slang, these firms are referred to as “blue chips.”

How does the NYSE work?

An established financial mechanism that determines the value of various companies in every corner of the world on a daily basis - this is what the New York Stock Exchange is today. Office hours are from 9:30 am to 4:00 pm (New York time). The work of the exchange is carried out by specialized specialists Specialists. NYSE employees are responsible for the order of trading on the exchange andliquidity support. The specialist serves as an intermediary in transactions between buyers and sellers, launches sales processes. In the event of an imbalance between supply and demand, the specialist has the right to use the firm's money to hold the value of the securities. In addition, the exchange specialists maintain an open book - a real-time feed of quotes of various securities, fulfill orders and orders of owners and buyers of securities.

In addition to specialists, the following brokers take part in the exchange:

- persons representing companies from the Listed companies;

- persons representing mutual and pension non-state funds Institutional investors;

- persons who individually invest securities;

- Independent Brokers who place orders for their clients;

- individuals representing brokerage houses and trading on behalf of certain brokerage firms NYSE Member Brokerage firms;

- floor brokers Floor Brokers. These are specialists who trade in the shares entrusted to them. There are currently twenty posts on the floor of the exchange, each with up to thirty sectors. One broker manages about thirty shares. As a rule, a broker on the floor is a specialist who has extensive experience in the exchange behind him.

Modern activity of the NYSE stock exchange is international. The economies of many countries, including such large ones as China and Russia, depend on the successful work of the NYSE. Competitiveness of anycountry, its role in the overall world processes directly depends on the success and profitability of the leading companies of this country. And the activities of the NYSE, as well as other stock exchanges in the world, are aimed specifically at developing the global economy as a whole, without separating companies and stocks by continents and states.