The inside story: Euromoney lights the fuse for the Big Bang
1985: The era when the City of London went global (from the imagination of Jon Macaskill).
Euromoney was quick to grasp the importance of financial landmarks and hit upon the idea of celebrating the 20th anniversary of the inaugural Autostrade Eurobond from July 1963.
By 1984 we had published a book on the first 21 years of the Euromarkets and begun gathering market luminaries to commemorate milestones and look ahead to potential opportunities.
The leading figures of the day were united in their devotion to free markets and low taxes, but they were divided on other issues. The question of lunch versus dinner was particularly vexed.
British veterans of the City of London generally skewed towards lunch in a private room or club as a way to bridge the awkward gap between noon and 4pm. Continental Europeans such as CSFB’s Hans-Joerg Rudloff argued instead for a full working day of innovation, followed by dinner and drinks at a venue such as Annabel’s.
It was at a jolly get-together in July 1985 that Euromoney hit upon a way to break the impasse.
“Why don’t we just give people a choice, so that you can have either or both of a long lunch and an evening in dubious company,” Euromoney suggested that afternoon to Stanley Ross, the creator of the grey market for bonds, who was playing spoof with some confused brokers for the value of the bill.
Michael von Clemm, the CSFB chairman who was our host for the day at his restaurant Le Gavroche, overheard us and immediately grasped the implications of our pitch for greater choice and free markets.
“We could also propose to Margaret Thatcher that we open up the entire City of London,” he said. “No more artificial divisions between jobbers and brokers, no more fixed commissions. We could even push discounted sales of state assets and deep tax cuts.”
David Scholey, who was not a regular at our gatherings but had taken the opportunity to dodge a compulsory graphology training session at his employer SG Warburg, said: “We don’t pay taxes on our deals anyway, isn’t that rather the point old boy?”
The other attendees saw the bigger picture, however, and a plan was hatched.
We realized that we needed a political insider to keep our project on course and report back on its progress.
“What about Badger Lamont?” we said. “He’s broadly sound and always looking for a way to top up the coffers.”
The others didn’t know him. “Badger as in der Dachs?” asked Rudloff.
I shot a badger once. Tricky blighter, was coming at me from the bottom of my garden in Highgate - David Scholey
“Norman Lamont,” we explained. “He’s an MP who used to work for NM Rothschild, now one of Thatcher’s ministers in public works or something similar. We used to call him Badger Lamont at Cambridge.”
“I shot a badger once,” Scholey pitched in. “Tricky blighter, was coming at me from the bottom of my garden in Highgate.”
The others ignored him and agreed that Euromoney would approach Lamont and enlist him in the cause.
There was a debate about a title for our initiative. Stanislas Yassukovich, who had recently gone undercover to infiltrate the London Stock Exchange, suggested Operation Hayek in a bid to appeal to Thatcher’s devotion to the Austrian economist.
“Too abstruse,” we said. “Why don’t we go for something simple but punchy, like ‘the Big Bang’?”
The rest is history.
Lamont took up a role as financial secretary to the Treasury in May 1986, where he was able to steer chancellor Nigel Lawson and prime minister Thatcher towards market reform.
On October 27, 1986 we celebrated the Big Bang in suitable fashion (that was a lunch plus dinner day), and the City of London was transformed into the dynamic global capital of free markets that we know today.
Was it a coincidence that the internet arrived and the Berlin Wall came down by the end of the same decade?
Perhaps, but without the contribution of the market pioneers who brought the world the perpetual floating rate note, the zero-coupon bond and the synthetic reverse convertible, it is hard to know how events would have unfolded.
Euromoney is glad to have been a player – in however minor a role – in that epochal drama.