Joan Paola Reyes Toca

International business-373

1986- The Big Bang U.K.

The day when the London Stock Exchange's rules changed was denominated as
the Big Bang, the name was due to the huge impact that it made to the market
activity in the U.K. those days. Thatcher’s government was the promoter of this
new economic system that was going to change some government rules that had
long restricted competition and was the starting of the privatization.
In 1986 the deregulation process started and the good days for London’s economy
began the stock exchange eliminated its restrictions on ownership and
management of its members by outside corporations, especially financial
conglomerates and helping the starting of the free market.
London was the most affected country with these changes, it was more than a
cultural shocked before the Big Bang the London Stock Exchange was a closed
market rule by anticompetitive regulations, also with the start of the Big Bang the
privatization began including the remove of the barriers to entry for private
operators to compete, as an example the bus deregulation in Great Britain in 1986,
and the progressive privatization of London bus services which was the process of
the transfer of operation of bus services from public transport to private companies.
This change encouraged the competition of companies in London and it helped a
lot in the development of the economic system and the innovative spirit from some
institutions.
The objective of Thatcher’s government was achieved, impulse London Economy
to the top in order to be a competitive country in the future. Twenty four years later
is when we can clearly see the benefits of the Big Bang. Competition has brought
down the cost of trading while a wave of new money has funded the technology
and innovation that has allowed London to keep pace with New York.
Thanks to all these changes nowadays London is the premier international
financial center, it is also recognized as the leader in one of the fastest growing
sectors of the economy as Europe is and of course is a major market for foreign
exchange transactions and international insurance activities. Now London is not
depending anymore on the U.K. economy market, is an independent country able
to operate and compete with other potencies like U.S.A and China.