It was cosy, clubby and under-capitalised. The City before Big Bang needed a rocket, and it got one from the reforms that took effect in October 1986. The centrepiece was the American model in which banks were permitted to own stock exchange firms, smashing the centuries-old City tradition that kept apart banking, investment advice and share trading.
Suitably encouraged, the Americans swept into town, buying up the City’s old broking firms and transforming them with new business practices, sophisticated risk management and huge balance sheets to fund the business. City grandees of a certain age were left gasping as the…
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