Big Bang

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The phrase Big Bang, used in reference to the sudden deregulation of financial markets, was coined to describe measures, including abolition of fixed commission charges and of the distinction between stockjobbers and stockbrokers on the London Stock Exchange and change from open-outcry to electronic, screen-based trading, enacted by the United Kingdom government in 1986.

The day the London Stock Exchange's rules changed on 27 October 1986 was dubbed the "Big Bang" because of the increase in market activity expected from an aggregation of measures designed to alter the structure of the financial market.

The effect of the Big Bang led to a significant changes to the structure of the financial markets in London. The changes saw many of the old firms being taken over by large banks both foreign and domestic and would lead in the following years to further changes to the regulatory environment that would eventually lead to the creation of the financial services authority.

In the UK, Big Bang became one of the cornerstones of the Thatcher government's reform programme. Prior to these reforms, the once-dominant financial institutions of the City of London were failing to compete with foreign banking. While London was still a global centre of finance, it had been surpassed by New York, and was in danger of falling still further behind.

Thatcher's government claimed that the two problems behind the decline of London banking were overregulation and the dominance of elitist old boy networks and that the solution lay in the free market doctrines of unfettered competition and meritocracy.

The effects of Big Bang were dramatic, with London's place as a financial capital decisively strengthened, to the point where it is arguably the world's most important financial centre. The boom resulted in the relocation of institutions into new developments in the nearby Isle of Dogs area, particularly that of Canary Wharf.

Clearing Banks[change | change source]

  • Barclays
  • Lloyds
  • Midland
  • Natwest

Merchant Banks[change | change source]

  • Barings->NetherlandsABN AMRO
  • Charterhouse->United KingdomMidland
  • County Bank->United KingdomNatwest
  • Hambros->FranceSociete Generale
  • Hill Samuel->United KingdomLloyds
  • Kleinwort Benson->GermanyDresdner Kleinwort
  • Lazard
  • Morgan Grenfell->GermanyDeutsche Bank
  • New Court->United StatesMerrill Lynch
  • NM Rothschild
  • Robert Fleming->United StatesJP Morgan
  • Samuel Montague->United KingdomMidland
  • Schroders->United StatesCitibank
  • SG Warburg->SwitzerlandSwiss Bank Corporation

Stockbrokers[change | change source]

  • Cazenove->United StatesJP Morgan
  • de Zoete Bevan->United KingdomBarclays
  • Fielding Newson Smith->United KingdomNatwest
  • Greenwell->United KingdomMidland
  • Grieveson Grant->GermanyDresdner Kleinwort
  • Henderson Crosthwaite->NetherlandsABN AMRO
  • Hoare Govett->NetherlandsABN AMRO
  • James Capel->United KingdomMidland
  • Laing Cruickshank->FranceCredit Lyonnais
  • L Messel->United StatesLehman Brothers
  • Mullens->SwitzerlandSwiss Bank Corporation
  • Pember Boyle->GermanyDeutsche Bank
  • Phillips Drew->SwitzerlandUnion Bank of Switzerland
  • Rowe Pitman->SwitzerlandSwiss Bank Corporation
  • Savory Milln->SwitzerlandSwiss Bank Corporation
  • Scott Goff Layton->United StatesMerrill Lynch
  • Scrimgeour Kemp Gee->United StatesCitibank
  • Vickers da Costa->United StatesCitibank
  • Wood Mackenzie->United KingdomNatwest

Stockjobbers[change | change source]

  • Akroyd Smithers->SwitzerlandSwiss Bank Corporation
  • Bisgood Bishop->United KingdomNatwest
  • Giles Cresswell->United StatesMerrill Lynch
  • Moutsdale->SwitzerlandUnion Bank of Switzerland
  • Pinchin Denny->GermanyDeutsche Bank
  • Smith Brothers->United StatesMerrill Lynch
  • Wedd Durlacher Mordaunt->United KingdomBarclays

Financial Institutions[change | change source]

International Organisations[change | change source]

Founded Name Notes
1930 SwitzerlandBank for International Settlements (BIS) Organisation of central banks
1944 United Statesthe World Bank Provides loans to developing countries for capital programs
1944 United StatesInternational Monetary Fund (IMF) Organisation of 188 countries working to foster global monetary cooperation and secure financial stability
1944 United StatesInternational Bank for Reconstruction and Development (IBRD) Offers loans to middle-income developing countries
1956 United StatesInternational Finance Corporation (IFC) Offers investment, advisory, and asset management services to encourage private sector development in developing countries
1958 LuxembourgEuropean Investment Bank (EIB) Finances operations to bring about European integration and social cohesion
1960 United StatesInternational Development Association (IDA) Offers concessional loans and grants to the world's poorest developing countries
1961 FranceOrganisation for Economic Co-operation and Development (OECD) Forum to stimulate economic progress and world trade
1966 JapanAsian Development Bank (ADB) Facilitates economic development in Asia
1966 United StatesInternational Centre for Settlement of Investment Disputes (ICSID) International arbitration institution which facilitates legal dispute resolution and conciliation between international investors
1983 SpainInternational Organisation of Securities Commissions (IOSCO) Association of organisations that regulate the world’s securities and futures markets

  1. REDIRECT globalization

Clearing Banks[change | change source]

  • Barclays
  • Lloyds
  • Midland
  • Natwest

Merchant Banks[change | change source]

  • Barings
  • Charterhouse
  • County Bank
  • Hambros
  • Hill Samuel
  • Kleinwort Benson
  • Lazard
  • Morgan Grenfell
  • New Court
  • NM Rothschild
  • Robert Fleming
  • Samuel Montague
  • Schroders
  • SG Warburg

Stockbrokers[change | change source]

  • Cazenove
  • de Zoete Bevan
  • Fielding Newson Smith
  • Greenwell
  • Grieveson Grant
  • Henderson Crosthwaite
  • Hoare Govett
  • James Capel
  • Laing Cruickshank
  • L Messel
  • Mullens
  • Pember Boyle
  • Phillips Drew
  • Rowe Pitman
  • Savory Milln
  • Scott Goff Layton
  • Scrimgeour Kemp Gee
  • Vickers da Costa
  • Wood Mackenzie

Stockjobbers[change | change source]

  • Akroyd Smithers
  • Bisgood Bishop
  • Charles Pulley
  • Giles Cresswell
  • Moutsdale
  • Pinchin Denny
  • Smith Brothers
  • Wedd Durlacher Mordaunt

The Big Bang model is that the universe begun in an extremely dense and hot condition and has expanded. The theory suggests, and measurements show, that the universe is still expanding today.[1]

The Big Bang is a scientific theory about how the universe started, and then made the groups of stars (called galaxies) we see today. The universe began as very hot, small, and dense, with no stars, atoms, form, or structure (called a "singularity"). Then about 14 billion years ago,[1] space expanded very quickly (thus the name "Big Bang"), resulting in the formation of atoms, which eventually led to the creation of stars and galaxies. The universe is still expanding today, but getting colder as well.

As a whole, space is growing and the temperature is falling as time passes. Cosmology is the name given to how the universe began and how it has developed. Scientists that study cosmology agree the Big Bang theory matches what they have observed so far.[1]

Fred Hoyle called the theory the "Big Bang" on his radio show. He did not believe the Big Bang was correct. Scientists who did not agree with him thought the name was funny and decided to use it. Since then, Fred Hoyle's reasons for not agreeing with the theory have been proven wrong.[2]

Scientists base the Big Bang theory on many different observations. The most important is the redshift of very far away galaxies. Redshift is the Doppler Effect occurring in light. When an object moves away from earth, it looks reddish because the movement stretches the wavelength. The reddish color occurs because red is the longest wavelength on the visible spectrum. The more redshift there is, the faster the object is moving away. By measuring the redshift, scientists proved that the universe is expanding and can even work out how fast the object is moving. With precise observation and measurements, scientists believe that universe was a singularity approximately 13.8 billion years ago. Because most things become colder as they expand, the universe is assumed to have been very hot when it started.[3]

Other observations that support the Big Bang theory are the amounts of chemical elements in the universe. Amounts of hydrogen, helium, and lithium seem to agree with the theory of the Big Bang. Scientists also have found "cosmic microwaves background radiation". This radiation is known as radio waves, and they are everywhere in the universe. Even so, it is now very weak and cold, but a long time ago it was very strong and very hot.[1]

The Big Bang might also have been the beginning of time. If the Big Bang was the beginning of time, then there was no universe before the Big Bang, since there was no concept of "before" without time. Other ideas state that the Big Bang was not the beginning of time 13.8 billion years ago. Instead, some believe that there was a different universe before and it may have been very different from the one we know today.[3]

Graphical timeline of the universe[change | change source]

A great deal happened in the first second of the universe's life:

Cosmic microwave background radiation Timeline of the Big Bang#Matter domination: 70,000 years Timeline of the Big Bang#Recombination: 240,000-310,000 years Big Bang nucleosynthesis Inflationary epoch Planck time Timeline of the Big Bang#Dark Ages Photon epoch Lepton epoch Hadron epoch Quark epoch Electroweak epoch Grand unification epoch The Five Ages of the Universe Reionization Graphical timeline of the Stelliferous Era Big Bang Planck epoch

References[change | change source]

More reading[change | change source]

  • Singh, Simon (2005). Big Bang: the most important scientific discovery of all time and why you need to know about it. Harper Perennial. ISBN 9780007152520.