The Government-Stock Exchange Accord

Abstract

The story of how Britain’s City revolution — a pace-setter in the global money shake-up — came about is an instructive example of how big events in national affairs can happen in a largely unplanned way. Strands of development intertwined, disparate forces contended over years and the outcome was what nobody had at first foreseen. Yet, as the drama unfolded, a degree of creative guidance was imposed and events were finally shaped to harmonise with the spirit of the time and the less than half-formulated instincts of Britain’s new Conservative leaders. Along the way, money men were spectacularly enriched, hallowed procedures were flouted and some official feelings were deeply bruised. It is a tale of how the unthinkable — a total about-turn in the Stock Exchange’s system and ownership — became the actual and how an era of stability gave way to one of helter-skelter change. The trigger to the revolution was a pact with the government in late July 1983 for reform of the Exchange’s rules.

Having this monopolistic market [the Stock Exchange] fixing its own prices … it couldn’t go on.

A banker.