Big Bang—A Retrospective

Peppered with anecdotes and written in a racy style, the book on the conjunction of events and circumstances that transformed the character of the City of London as an international financial centre is a delight to read. Till the day of the Big Bang on 27 October 1986, hailed by many as a “cosmological event,” the institutions in the City operated like private clubs, each under the effective control of a family managing the money and affairs of at most 500 well-connected British families. The mid-1960s witnessed major stirrings. London became the centre of euro–dollar bond market, thanks to a brilliant innovation by Seigmund Warburg, the German Jewish banker, a somewhat late entrant to the City. Hordes of American investment bankers and Japanese bankers descended on London given its geographical positioning to act as a bridge between different financial centres across the world.

On May Day 1975, sweeping changes in the working of financial markets revolutionised Wall Street in New York but this did not shake either the City or the Government of the United Kingdom (UK). The brokers and jobbers who were sheltered as part of a protective cartel and were prisoners to their own insular beliefs and interests, remained pleased with the continuity. The government seemed reluctant to take the initiative for reform, deeply preoccupied as it was during the 1970s with its own financial difficulties and in securing a lifeline from the International Monetary Fund. In any case, the government’s attitude was, by and large, the same as it was in the heydays of British dominance. The City claimed to know what was best; and if those who were the key players in the City were reluctant to let in fresh air by way of competition, it was their business or so it was believed.