Which 1720 financial collapse followed the failure of the South Sea Company's share-price boom?

The 1720 financial collapse that followed the South Sea Company's share-price boom was the South Sea Bubble.

The South Sea Company was founded in England in 1711 and received a monopoly over trade with Spanish South America, although its actual trading opportunities were limited. It also took on government debt in exchange for shares and promoted the prospect of enormous commercial profits.

Its stock price rose dramatically in 1720 as investors bought shares amid widespread speculation. The company was not alone: many other ventures were promoted during the same speculative wave, and Parliament passed the Bubble Act to restrict some companies. When confidence weakened, South Sea shares collapsed, ruining many investors.

The scandal affected politicians and company directors, while economist John Law's Mississippi Company scheme produced a related collapse in France. The South Sea Bubble is not a modern stock-exchange crash, but it is one of the best-known early episodes of financial speculation, fraudulent promotion, and loss of confidence.