Forty Years of Financial Liberalisation or the Unfortunate Americanization of a Capitalist Gentlemen' Club

Raphaël BOUSQUET * Attaché Services financiers, Direction générale du Trésor, Ambassade de France à Londres.Contact :
Jean-Christophe DONNELLIER ** Chef du Service économique régional, Direction générale du Trésor, Ambassade de France à Londres. Contact :
Thomas ERNOULT *** Conseiller financier, Direction générale du Trésor, Ambassade de France à Londres.Contact : tenons à remercier Philip Augar, Nick Collier, Giles French, David Green, Andrew Hilton, Andrew Whitworth et William Wright pour leur appui et leurs remarques avisées lors de nos recherches. Toute erreur et omission éventuelle dans cet article relèvent de notre seule responsabilité.

This article examines the main stages of the liberalisation of the financial sector in the United Kingdom (UK) over the past forty years. Perhaps counterintuitively, this period is also characterised by the increasing formalisation of financial regulation in the UK. Until the 1980s, the London financial marketplace was indeed composed of diverse but fragmented players governed by a light and largely informal framework. By opening up the London Stock Exchange to new actors such as foreign and domestic banks in 1986, Margaret Thatcher's Big Bang led to the emergence of large financial conglomerates and transformed the City. Yet, despite the introduction of a more formal regulatory regime under Thatcher, the UK financial sector was ridden by crises and scandals during the 1990. The 2000s saw the City undergo another period of intense growth and development – partly driven by the liberal tendencies of its new regulator – before crashing down during the global financial crisis of 2008. To a certain extent, the process of financial liberalisation that began under Thatcher came to a halt after the crisis with the recent introduction of ring-fencing, a set of rules requiring UK banks to separate their retail and investment activities. The parallel trend towards the increasing formalisation of the financial regulatory framework, however, endures to this day.

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