Which 1720 financial scandal gave its name to Britain's speculative “bubble” crisis?

The 1720 financial scandal known as the South Sea Bubble gave its name to Britain’s speculative bubble crisis.

The South Sea Company received a government-backed monopoly over trade with Spanish South America in 1711. In practice, the company’s expected commercial opportunities were far greater than its actual trading results. Its shares rose dramatically in 1720 after a plan allowed the company to assume part of Britain’s national debt.

Investors included aristocrats, politicians, and ordinary savers. The price surge encouraged imitation companies and unrealistic speculation. When confidence weakened later in 1720, South Sea shares collapsed, ruining many investors and prompting a political scandal.

The event is often confused with the earlier Dutch Tulip Mania and France’s Mississippi Bubble, which were separate episodes. Parliament investigated the South Sea Company, and several directors were punished for corruption and financial misconduct.