The 1720 speculative crisis caused by the collapse of the South Sea Company's share price was the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with parts of Spanish America, although its actual trading prospects were limited. In 1720, Parliament approved a plan allowing the company to assume a large portion of Britain's national debt. Investors became enthusiastic, and the share price rose dramatically during the year.
The boom attracted public speculation and imitative ventures. The market later reversed, and the company's shares fell sharply. Many investors suffered heavy losses, including members of the political and social elite. The scandal also revealed corruption involving company directors and public officials.
The South Sea Bubble is often grouped with the Mississippi Bubble in France because both booms occurred in 1720. They were separate schemes and separate collapses. The British episode gave the word “bubble” a lasting place in financial vocabulary.