Which 1720 Paris market collapse followed the failure of John Law’s Mississippi Company scheme?

The 1720 Paris market collapse that followed the failure of John Law’s Mississippi Company scheme was the Mississippi Bubble.

John Law’s Mississippi Company held a monopoly over trade and development claims connected with French Louisiana. Law also gained control over parts of France’s financial system, and the company’s shares rose dramatically as investors expected enormous profits from colonial commerce.

The boom was supported by paper money and easy credit. When confidence weakened, investors rushed to exchange shares for more stable forms of wealth. The share price collapsed in 1720, destroying fortunes and damaging confidence in Law’s banking system.

The Mississippi Bubble occurred at roughly the same time as Britain’s South Sea Bubble, but they were separate schemes. Their simultaneous collapses are often studied together as early examples of speculative financial bubbles.