Which 1720 British market collapse followed the bursting of the South Sea Company bubble?

The 1720 British market collapse that followed the South Sea Company bubble was called the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish America, but its shares became the center of intense speculation. Investors bought stock largely because prices were rising, while promotional claims about the company’s potential encouraged unrealistic expectations.

The company’s share price climbed dramatically during 1720 before collapsing later that year. The failure ruined many investors and damaged public confidence in companies and financial promoters. Parliament investigated the affair, and prominent figures were accused of corruption or improper dealings.

The South Sea Bubble occurred alongside the Mississippi Bubble in France, which involved John Law’s Mississippi Company. The two episodes are sometimes discussed together as Europe’s great speculative bubbles of 1720, but they were separate companies and national crises.