The 'Big Bang' refers to the deregulation of the London Stock Exchange, which took place on 27 October 1986. As a result, foreign firms were allowed to buy UK stockbrokers; fixed share-dealing commissions were scrapped; and firms were allowed to act as both brokers for clients and deal for themselves. At the same time, the open outcry system of the old London Stock Exchange trading floor was replaced with computerised trading.
The changes are seen as among the most important factors leading to the City's current position as a top global financial centre. Traditional brokerages vanished, paving the way for today's huge investment banks, while, most importantly for the private investor, competition drove down share dealing costs.
See Tim Bennett's video tutorial: What was the Big Bang?
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Why Chinese stocks are so far out of favourThere’s little appetite for Chinese stocks despite low valuations.
-
The 62 UK areas where you could be priced out of using your Lifetime ISASaving for your first home in Croydon, Ealing, Brent or any one of these other locations? You could be at risk of being priced out of using your Lifetime ISA
