'Big Bang' Pioneers Rethink Banking Overhaul
By MARK WHITEHOUSE
Wall Street Journal
LONDON -- In the 1980s, London launched a radical set of market reforms known as Big Bang, turning the city into ground zero of a revolution that begat today's buckling global financial system. Now, as leaders of the world's 20 largest economies gather here to fix that system, some Big Bang architects are questioning the ideal of unfettered capitalism on which it was built.
In retrospect, they say, the movement unleashed unanticipated forces such as global banks whose influence extends beyond the reach of any one regulator. Those forces may be difficult for the G-20 -- or anyone -- to rein in.
London is bracing for angry protests before and during Thursday's Group of 20 summit, which will see fortress-like security for world leaders.
Few events embody the free-market thinking that shaped modern finance better than Big Bang. Under former Prime Minister Margaret Thatcher, a small group of officials, including Treasury chief Nigel Lawson and Secretary of State for Trade and Industry Cecil Parkinson, scrapped decades-old rules at the stock exchange and other institutions that they feared could leave London trailing behind rapidly globalizing markets.
The reforms helped trigger an economic boom and boosted the status of London's banking district, known as the City, as one of the world's financial hubs -- and as a testing ground for some innovations that wound up at the center of the current crisis.
(More here.)
Wall Street Journal
LONDON -- In the 1980s, London launched a radical set of market reforms known as Big Bang, turning the city into ground zero of a revolution that begat today's buckling global financial system. Now, as leaders of the world's 20 largest economies gather here to fix that system, some Big Bang architects are questioning the ideal of unfettered capitalism on which it was built.
In retrospect, they say, the movement unleashed unanticipated forces such as global banks whose influence extends beyond the reach of any one regulator. Those forces may be difficult for the G-20 -- or anyone -- to rein in.
London is bracing for angry protests before and during Thursday's Group of 20 summit, which will see fortress-like security for world leaders.
Few events embody the free-market thinking that shaped modern finance better than Big Bang. Under former Prime Minister Margaret Thatcher, a small group of officials, including Treasury chief Nigel Lawson and Secretary of State for Trade and Industry Cecil Parkinson, scrapped decades-old rules at the stock exchange and other institutions that they feared could leave London trailing behind rapidly globalizing markets.
The reforms helped trigger an economic boom and boosted the status of London's banking district, known as the City, as one of the world's financial hubs -- and as a testing ground for some innovations that wound up at the center of the current crisis.
(More here.)
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