the opposite of the Big Bang is Big Implosion

the freeing of the stock markets under Maggie THatcher
was known as the Big Bang. Nice metaphor.
Except it should have killed most of the bankers with its
force in much the same way that it is hurting society now.

Indeed it's causing a Big Implosion in the rest of society.

checkitout: Guardian

Who can deliver the cultural Big Bang that the City needs?
Thatcher's unleashing of the markets led to crisis 25 years later. Now only politicians, if they have the guts, can force reform


David Kynaston guardian.co.uk, Monday 24 October 2011 22.00 BST
Big Bang created the City we know today, but this week's 25th anniversary is not an occasion for triumphalism. Severe faultlines in our financial system continue to bear heavy responsibility for the debilitating economic conditions that have persisted since the banking dramas of 2007-8. Reform is needed as urgently now as it was then, but over recent years dismayingly little has been achieved. Even so, City history tells us not only that change-minded politicians have on occasion been able to bend the City to their will, but that the City has always been capable, for all its protests, of adapting to new external pressures.

Big Bang itself took place on 27 October 1986 and was essentially the deregulation of the stock exchange, opening up its member firms to foreign ownership, mainly American banks. It conclusively signalled the third phase of the City of London's modern history and sought to reprise the marvels of the first phase which ended with the onset of the first world war. Before that, for almost a century, the City was in its freebooting pomp, dispensing capital and credit to all quarters of the globe and becoming the greatest international financial centre the world had seen.

The second phase, from the end of the 1914-18 war to the mid-80s, began with New York supplanting London, compelling the City to engage closely for the first time with British industry. But the rise of the European markets in the 60s, followed by the floating of exchange rates and abolition of exchange controls, meant that by the early 80s the forces for a re-internationalisation of the City had become irresistible. Yet they were still mostly resisted by the City itself, a complacent place where restrictive practices ruled and the living was largely easy. Thus the Margaret Thatcher-imposed Big Bang.

Phase three would prove, in its own terms, a brilliantly conceived and realised vision. Frankfurt and Paris may have both aspired to be Europe's dominant financial capital, but from the 1990s they were left trailing far behind. Indeed, London by the new century was leading the world, well ahead of New York and Tokyo. Unfortunately it was an international financial capital with deeply problematic characteristics.

Not least as a result of the presence of turbo-charged US investment banks. In some ways it was a positive process, as a fiercely driven meritocracy replaced nepotistic capitalism. But damaging downsides included the creation of behemoths liable to conflicts of interest; transactional banking supplanting relationship banking; an aggressively competitive bonus culture; and risky proprietary trading, with "swinging dick" traders driven by the lure of a bonus to take huge one-way bets – one way because they were gambling with "other people's money", impossible in the City's old partnership structure.

Big Bang altered the City in another fundamental way. The hitherto cohesive, club-like, face-to-face dealings between people of similar background changed from the 80s: the composition became less white, British and male, the financial world spread beyond the Square Mile, and the old intimacy gave way to screens and large, self-contained silos. Traditionally the City had run on trust – crucial for financial stability – but in autumn 2008, the absence of that vital ingredient was painfully apparent as interbank money markets dried up.

It also involved a conscious new model for the British economy. With de-industrialisation already under way, the Thatcher government bet the house on services, above all financial services. Crucially, these would be geared to the world at large rather than the domestic economy, least of all manufacturing. Over the next 20 years, as the City roared on, few questioned that model or the implications of the City becoming an increasingly detached, offshore island, with the grotesque imbalance in material rewards sucking in the brightest and best. And of course, City taxes paid for many new schools and hospitals.

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