Which 1720 British financial collapse followed the failure of the South Sea Company?

The 1720 British financial collapse surrounding the South Sea Company was the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish South America, although its practical trading activity was limited. In 1720, investors bought shares amid extravagant expectations, and the company’s price rose dramatically before collapsing later that year.

The episode damaged investors, companies, and public confidence. Parliament investigated the scandal, and prominent figures were accused of corruption or improper speculation. The crisis also affected banks and businesses connected to the boom.

The South Sea Bubble is often discussed alongside the Mississippi Bubble in France, which also collapsed in 1720. They were separate schemes, however. The South Sea episode was a British corporate and market scandal, not a general name for every early speculative bubble.