Which London financial crisis of 1720 followed the collapse of the South Sea Company?

The 1720 London financial crisis following the South Sea Company’s collapse is known as the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish America and proposed converting government debt into company shares. Its stock price rose dramatically during 1720, attracting investors who expected continuing profits. When confidence weakened, selling accelerated and the price collapsed.

The episode damaged investors, exposed speculative excess, and triggered a political scandal in Britain. Parliament investigated the company’s directors and allegations of corruption. The South Sea Bubble is often grouped with the Mississippi Bubble in France, which collapsed during the same broad period, but they involved different companies and political systems. “Tulip Mania” refers to a much earlier Dutch speculative episode, while “Railway Mania” describes a nineteenth-century British boom. The 1720 crisis helped shape later debates about financial regulation and speculative bubbles.