Emma Barrett
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The Bank of England
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This chapter traces the Bank’s concerns and detailed planning, both in its own capacity and as tasked by the Government, throughout the Stock Exchange reform period. Overwhelming evidence that reforms emanated from the Government and Bank challenge the notion that the Big Bang was the ‘unintended consequence’ of government action and, indeed, the Bank’s official position, designed to carry the market, that reforms were practitioner-led. In the face of change, the Bank’s overriding aim was to maintain a central stock market, controlled and regulated by the authorities. Ensuring the Stock Exchange built and controlled the market’s electronic hardware and software was a means to this end, and guarded against fragmented, unruly markets. Ultimately, prudential regulation was sacrosanct whereas precise trading arrangements and even foreign ownership of firms were not. Control of the central market outweighed later stated objectives of attracting international capital and strengthening London as a world financial centre. Indeed, it was only after reforms had been agreed in principle that the Bank turned its attention to the impact of international capital and foreign competition on the City. An evolving awareness of the likely impact of reforms on British firms, stark choices and interventions to protect British interests show that then, far from embracing international capitalism, the Bank sought to protect national interests, often imperceptibly through the exercise of soft power. In the end, protectionism proved insufficient, but revealing intent challenges the ‘death of gentlemanly capitalism’ thesis which claims the authorities betrayed the City by not protecting it.

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‘Survival capitalism’ and the Big Bang

Culture, contingency and capital in the making of the 1980s financial revolution

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