Summary There is a general agreement among financial specialists that for the economy of any country to grow smoothly, there has to be proper management of capital markets as well as banking systems. There are numerous advantages that can be drawn from properly functioning capital markets, and this is something that can be attested to by the improved economies of many countries in recent times. Examples of such countries include England, United States, Japan and Netherlands. This probably explains why finance experts have shown a sudden interest in researching about this sensitive topic of financial development. For financial development to be successful in any country, a lot of factors have to be considered and treated with the importance they deserve. Most of those factors are political economy factors like industrial and financial incumbents. The role of financial and trade openness can also not be underscored, especially when it comes to looking at mechanisms that impact the inducements of incumbents. For any political economy structure to be regarded as strong and vibrant, there has to be a delicate relationship of political and economic powers. This is what sets the stage for economic institutions to be successful. Financial experts also advise about having stable political and economic environments because this is what comes in handy in simplifying economic growth in most countries. No country can witness the desired economic growth if the key players in the market do not feel secure. Mechanisms also have to be in place to ensure that there is protection of property rights, and that there is no political interference. Much of the literature touching on finance growth has often failed to give a deeper insight on the influence that colonizing powers yield as far as financial markets are concerned. There is an agreement in financial growth circles that for the capital markets to post impressive results in markets such as those in Europe and Asia, the political economy origins should researched even further. This is something that becomes evident from the case of Hong Kong. The nation has a financial development system that is bank-based, and various lessons can be learnt from this. It made it easier for large banking monopolies which have better political connections to survive at the expense of other smaller institutions. One such banking monopoly that was prominent is the Shanghai Banking Corporation. For most of such institution, what served as the model was the Bank of England, otherwise abbreviated as BOE. Most financial development efforts in most countries fail to be successful because the government of the day is not offering the support that is required. The government has to be visible and play an integral role in strengthening financial institutions. This consequently goes a long way in improving the GDP of such countries. Examples of countries and cities that have benefited significantly from these model are Genoa and Venice. Certain proven measures should be put in place to determine the most efficient ways that countries can take part in finance developed. These measures will obviously vary in different countries but they should take into consideration contemporary and developmental outlooks. The early stages are key in financial development. One period that remains important in the financial development history of England is the period starting from 1672 through 1988. Trading monopolies were especially at the forefront in shaping the financial activities of the country, most of which trickled down to the government. The period will also remain etched in the memories of financial experts because it marked the time that the government was beginning to lose its integrity as a trustworthy debtor. At the time, Charles II had suspended all the repayments, a move that did not go down well with some quarters in the capital and financial markets. The move put into question the property rights that investors had. The period was also marked by the coming up of financial markets. In a bid to ensure public finances posted better results, trading companies were given monopoly rights by the government. Most investors were impressed by the fact that firms were giving them eye-catching agreements with regards to liquidity, expected return and default risk. The London stock market took long to emerge before finally rolling up its operations in the 17th century. For the process to be successful, the input of both public and private stakeholders was required. The monarch was instrumental in shaping most financial decisions of the time, although even the joint stock companies and the parliament also featured prominently. Further, political economy aspects felt their existence felt by their strong presence in the capital markets. Joint stock companies were given monopoly rights by the public sector, and this is what encouraged the development that was witnessed at the time. The events after this led to the formation of the London Stock exchange which rolled out services in 1773. The companies which dictated market operations at the time included Hudson s Bay Company, East India Company, as well as Royal African Company. The monopoly rights were at the hands of the monarch, and the provisions for such arrangements were clearly spelled out in the charter. For all the Eastern parts of the English trade, the monopoly rights were in the hands of the EIC. This is proof enough that the monopolies were big at the time. At the time, stock exchange had high localization, and the market had free market qualities, especially since information and goods moved freely to all corners. This was of great benefit because it helped the joint stock companies in improving their profitability prospects. A parliamentary statute that was passed in 1694 gave the Bank of England the mandate to start operations. It had the monopoly advantage of issuing paper money and also taking deposits. Monopolies at the time covered a significant percentage of the stock market, and this greatly worried financial experts. There was a steady rise of stock market capitalization, and bigger companies were absorbing smaller companies, especially those that could not cope with the stiff competition. Appraisal This article is informative and educative in that it gives deep insights on the origins of financial and capital markets across Europe and Asia. A keen analysis reveals that this is an area of study that was conspicuously under researched, despite its obvious significance to the economic stability of most countries. The article is therefore helpful for anyone with an interest in the inside dealings of financial markets because it gives in-depth analysis of the topic. From the article, one can gain helpful information about how countries can benefit from well-functioning capital markets. By ensuring that the financial environment is conducive, countries can be able to keep hold of investors who will be encouraged by the safety that they receive. The article also talks in depth about the functions of various institutions in ensuring that the capital markets are properly nurtured right from their time of formation. What makes the article particularly impressive is the fact that it gives a step by step analysis of what led to the formation of different financial institutions, and how they grew to achieve their current status. The pieces of information contained in the research are not only accurate, they are also conclusive, and this gives the article the much needed credibility. It is evident that sufficient research was carried out, and this can be evidenced by the fact that the article is not short of statistics to back the points that have been put across. The article also has credible sources that have all been drawn from various areas, and this also goes a long way in giving the article credibility. From the article, readers can gather that during the early stages after the establishment of financial and capital markets in England, the monarch had the final say, and it goes on top point to the effects that this had on the overall economy of the country. It is evident that the article leaves nothing to chance, as the authors go ahead to explain in details how the role of the monarch was received by different players in the market such as the joint stock companies and the investors. It explains how England was able to get away from the traditional methods guiding the country s financial institutions, and how the parliament eventually came to establish itself in the decision making process. The parliament was able to wrestle some critical statutory powers from the hands of the monarch, and this was instrumental in bringing transparency to the operations of the government. The parliament played its part effectively, ensuring that all government dealings were properly scrutinized. After these measures were put in place, there was a general drop in government spending, and this only shows how inefficient the monarch was in handling key financial decisions. From the article, helpful lessons can be learnt, one of them being that no single institution should be given the mandate to control financial matters, especially if there is no any oversight authority. The article has an impressive organization, and charts have been placed strategically to give additional information, especially on vital dates and statistics. The authors are obviously well-informed, and this can be attested to by the fact that they give the development of events in a manner that is easy to follow. There is also a conclusive and in-depth discussion of important points, and the article gives enough information on all key areas. There are enough sub-headings to help give additional information, and this makes it easier for readers to understand the article. There is a clear explanation of how monopolies impacted the government at the time, and how these experiences were received by the different institutions. One area of the article that fails to inspire is the fact that it covers too much historical ground, and in doing so, fails to show how financial markets have changed over the period. The article also has numerous statistics and figures, and this can be counter-productive in that it could confuse some readers. Overall, the article is educative. Bibliography DEMETRIADES, P., 2011. Political Economy Origins of Financial Markets in Europe and Asia.. Elsevier, 39(5), pp. 686 ?699,.