What was the name of the 1720 British financial bubble centered on the South Sea Company?

The 1720 British financial bubble centered on the South Sea Company was the South Sea Bubble.

The South Sea Company received a government-backed role connected with British government debt and hopes for profitable trade with Spanish America. Its shares rose dramatically in 1720 as investors were attracted by optimistic claims, political influence, and easy credit. The company’s actual trading prospects were far smaller than many investors imagined.

When confidence broke later that year, the share price collapsed. Investors lost fortunes, and the scandal damaged public trust in company promotion and government oversight. Parliament investigated the affair, and several politicians and company directors faced severe criticism or punishment.

The South Sea Bubble unfolded alongside John Law’s Mississippi Bubble in France, another major speculative episode. They are related but distinct events. The South Sea episode is also an early example of how debt conversion, monopoly privileges, social enthusiasm, and leverage can combine to inflate an asset price far beyond underlying business results.