Celebration time

London, Oct. 25 (Reuters): Luminaries of London’s financial services industry will gather on Thursday to celebrate the 20th anniversary of the ‘Big Bang’ that helped transform the City of London from a gentlemen’s club into a global financial powerhouse.

They will raise their glasses in the Mansion House, a Georgian palace built in 1739 as the official residence of the Lord Mayor of the City of London.

The Mansion House’s grand facade hasn’t changed much since 1986, when Big Bang deregulated the London Stock Exchange, a move that spurred the City’s internationalisation.

The City surrounding the Mansion House has seen big changes not only in the numbers of foreign banks and trading companies that have moved in, but also changes in culture that have made it both more diverse and more cut-throat.

People who worked in the City 20 years ago remember it as a male-dominated club, where family or public school connections helped people into jobs.

The trading floor of the London Stock Exchange was a real marketplace where the traders all knew each other.

“A lot of it was old money, people didn’t have to prove who they were,” said one trader who started in the City in 1970. He recalled one “jobber” who used to go from the City to the Savoy Hotel for lunch everyday and race horses with Queen Elizabeth’s Mother.

Peter Meinertzhagen, chairman of UK broker Hoare Govett, whose City career spans 40 years, sees some of the changes as detrimental, others beneficial.

When he first started work in the City, his office opened at 8.30 am and no one stayed beyond 5.30 pm. Now he says people are in at 6.00 am and stay until midnight or longer. “It’s an all-consuming occupation — nobody has time for anything else.”

Technology has definitely helped. “I can remember when I first started on the sales desk, every other phone call I made I got a crossed line,” Meinertzhagen said.

Big money

As the City has expanded, so have bankers’ and brokers’ pay packets, which can now run into millions of pounds. But the increased competition has made it tougher for the banks themselves to make money from buying and selling shares.

“The orders that are executed now are huge in comparison and the market is much more competitive,” said David Buik of spread betting firm Cantor Index. “As a result of volumes being up, commissions are way, way down. It’s dog eat dog.”