As the 30th anniversary of Big Bang loomed, I found myself back at the scene of my City demise. Ebbgate House — headquarters of BZW, the investment banking arm of Barclays where I worked until one fateful morning in 1992 — fell deservedly to the wrecking ball a decade ago. It was replaced by Riverbank House, and there I was last week, hovering above where my desk used to be, talking about ‘why no one listens to the City any more’ and reliving the P45 moment that released me into the happier world of journalism.
Personal echoes apart, this was also a moment to revisit Big Bang, the Thatcherite reforms launched on 27 October 1986 that allowed banks such as Barclays to buy stock-exchange firms, create BZW and its ilk, and compete against Wall Street’s giants. Arguably, Big Bang cemented for London the pre-eminent place in the financial world that Brexit negotiators must now seek to defend. It attracted huge foreign investment and critical mass in every area of finance, up to and including the now fashionable ‘fintech’. It provoked the development of Canary Wharf and the rebuilding of the Square Mile itself, providing unrivalled trading-floor space. It replaced the cartels of the old City with a fiercely competitive capital market of vast scale and sophistication.
But I still believe the negatives of Big Bang outweighed the positives. New ownership structures destroyed the partnership ethos that worked so well in terms of risk control and specialisation. A community of niche businesses that lived on their wits became an oligopoly of ill-managed and largely foreign-owned conglomerates. The urge to imitate New York engendered a bonus-hunting hire-and-fire culture that distorted risk judgment and eroded loyalty, trust and institutional memory. Long-term client relationships gave way to transactional and securitised ways of business in which human empathy was lost. The Thatcherite notion of ‘people’s capitalism’, embodied in the privatisation share sales of the 1980s, was buried as the City retreated into a self-admiring, self-serving silo; rule-bending, mis-selling and trading folly abounded.
And that, in a nutshell, is why no one listens to the City any more. If Brexit breaks open the silo and shakes out the complacency, perhaps it will encourage London’s financial community to rediscover its better self.
This is an extract from Martin Vander Weyer’s ‘Any Other Business’, which first appeared in this week’s Spectator magazine