Skip to main content

Economic History Society awards research grant to ICMA Centre academics

Screen Shot 2016 07 19 at 14 14 53

Tony & Miriam collageThe Economic History Society has awarded a Carnevali Small Research Grant worth £3,000 to Dr Tony Moore, a medieval economic historian, and Dr Miriam Marra, a finance academic specialising in credit risk, both academics teaching at the triple-accredited Henley Business School's ICMA Centre.

The Carnevali Small Research Grants Scheme encourages research initiatives and pilot studies in economic history. Miriam and Tony's project will aim to deepen our knowledge of medieval credit markets and also investigate how reliable the certificates are as a historical source.

Project summary: "Debt and default in medieval England"

A basic question facing any would-be lender is simply: will the borrower pay me back? If the chances of default were believed to be high, then either the lender would have to increase the interest rate charged to compensate for this credit risk or else not lend at all. Indeed, scattered evidence suggests that private interest rates in medieval England were in the order of 15-25% APR and credit may have been rationed. Previous studies have attributed this to the cost of capital, the usury prohibition, the illiquidity of thin credit markets and difficulties in enforcing debt agreements. However, the underlying role that high default rates may have played has not been studied directly, largely because of the lack of data suitable for quantitative analysis.

The pilot study will take advantage of a rare coincidence of two sources. In 1283, Edward I established a system of debt registries to improve the enforcement of credit agreements and hopefully spur economic activity. In case the debtor did not repay, the creditor could apply for a certificate proving the debt and enter into a faster debt collection process. Tens of thousands of these certificates survive today in the National Archives and have been studied extensively by historians. By their nature, of course, the certificates only provide information about defaulted loans and not those that were repaid.

For a few years in the later thirteenth and early fourteenth centuries, however, the original recognisance rolls of the city of London still survive. These record all debt agreements, not just those that defaulted. By collating the recognisance roll with the certificates, it will be possible to identify which debts ultimately defaulted and which were repaid, allowing us to calculate default rates. Furthermore, comparing the samples of defaulted and performing loans will allow us to analyse any factors driving credit risk.

Dr Miriam Marra

Associate Professor of Finance, ICMA Centre

Dr Tony Moore

Lecturer in Finance
Published 19 July 2016
Topics:
Research news

You might also like

On the odds of no-deal Brexit

3 July 2019
Dr Ioannis Oikonomou discusses the latest story on the Brexit leadership, behavioural biases and the repetition of history.
Business News

PhD Student Satchit Sagade published in Bank of England Working Paper

17 December 2012
ICMA Centre PhD student Satchit Sagade recently published a working paper for the Bank of England together with Research Economist for the Bank of England, Evangelos Benos. The paper entitled “High-frequency trading behaviour and its impact on market quality: evidence from the UK equity market”, studies the behaviour of high-frequency traders in the UK equity market and analyses its impact on market quality.
Research news

M&A Mega-Deals Create More Value Now than Ever Before

14 November 2016
New ICMA Centre research by Dr George Alexandridis and PhD Nikolaos Antypas reveals mergers and acquisitions (M&As) create more value now than they ever have done before.