1986 – the sudden deregulation of the financial markets
On the 27th October 1986, the London Stock Exchange rules changed, the day was forever known as ‘Big Bang’ Expectation of increased market activity. The origins of the change due to an agreement to settle a long-running antitrust case by the Office of Fair Trading against the London Stock Exchange. The investigation was into restrictive practices, fixed commissions, the separation of duties between market makers and brokers and traders.
An agreement was reached between Thatchers Government and the London Stock Exchange to settle, 3 years later the day arrived ‘Big Bang’ in the financial heart of London. The changes had far-reaching implications, many of the smaller London firms were taken over by larger banking firms. The creation of the Financial Services authority – later to change again.
The outcome of the Big Bang was dramatic, the cornerstone of Thatcher’s reform programme. London’s place as a financial capital was strengthened. decades later London became home to literally some of the biggest banking institutions in the world.