London's Big Bang rewired global finance in one day
On this day · 27 October 1986
On a single autumn morning in 1986, London tore up its trading rulebook and the City was never the same again.
On 27 October 1986, the London Stock Exchange overhauled its rules in a single stroke that the City nicknamed the Big Bang. Fixed minimum commissions were scrapped, the old wall between stockbrokers (who advised clients) and stockjobbers (who held shares) was demolished, and foreign banks were finally allowed to own British firms.
The reform also swept away the trading floor. Shouted open-outcry dealing gave way to screen-based electronic trading, with prices flashing on computer terminals instead of being haggled face to face. The change grew out of a July 1983 deal between Margaret Thatcher’s government and the Exchange to settle a long-running competition case.
Day one was almost a fiasco: the new computer system buckled within minutes and dealers briefly reverted to old habits.
Despite the stumble, the effect was lasting. Lower costs and open access drew global capital to London, cementing its status as one of the world’s leading financial centres and reshaping how shares are traded everywhere.
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