France’s stock exchange suffered the 1720 crash associated with John Law’s Mississippi Company.
John Law’s Mississippi Company became the center of a huge speculative boom in France. Investors bought shares based on expectations about the company’s colonial trading prospects and the financial system Law was building around the Banque Royale.
Share prices rose dramatically in 1719 and early 1720, then confidence broke. Attempts to support the share price and manage conversions between bank notes and company shares could not stop the rush to sell. The collapse damaged trust in paper money and public finance in France.
The episode is often grouped with Britain’s South Sea Bubble, which also collapsed in 1720. They were separate schemes in different countries, although both became classic examples of early modern stock-market speculation and crowd psychology.