London's Big Bang at 25, origin of today's financial world
Twenty five years ago, digital clock leaves flipped over to 9 a.m. and the London Stock Exchange opened to computerised trading in a deregulatory coup that transformed British investment banking -- the "Big Bang".
Banks with long histories but small balance sheets were bought up by foreign firms, creating investment banking as it is today: giants that advise on mergers and takeovers and raise capital, as well as making trades and markets.
The deregulation, championed by Prime Minister Margaret Thatcher and going further than anything world banking had seen, has been hailed as a brilliant innovation that cemented London's role as a global financial powerhouse.
But it also helped create today's "too big to fail" global banks -- and far from everybody is happy about it.
Protestors from the "Occupy the London Stock Exchange" movement marked the anniversary with a demonstration on Thursday in Canary Wharf, the British capital's new financial district.
"We're here because it's the silver jubilee of Thatcher's shock deregulation," one protestor told Reuters.
"The deregulation of the banking system in a way led to the financial crisis we have today. Creating wealth in itself is not a bad thing, but the distribution is out of whack," said another protestor, Allan MacDonald.
Bank stocks soar 2-3% on possible recapitalisation plan
Bank stocks had a good start to trade on Friday, up anywhere between 2 and 3%, on talks of the ambitious bank recapitalisation plan.
The plan, estimated to be worth Rs 5.5 lakh crore and spread over the next 10 years, is likely to be discussed by five secretaries of the finance ministry on Monday.
The plan could lead to setting up of an SPV that will be made responsible for ensuring that 26 public sector banks are adequately capitalised as mandated by the Basel III norms that will be operational in the next couple of years.
Financial services secretary DK Mittal said that the recapitalisation plan could be initiated from FY12 itself.
He added that Syndicate Bank, Union Bank, Bank of Baroda, SBI and Indian Overseas Bank will see capital infusion this fiscal.
Syndicate Bank touched an intraday high of Rs 107 and an intraday low of Rs 105.40. At 09:51 hrs the share was quoting at Rs 106.20, up Rs 3.10, or 3.01%. It was trading with volumes of 23,247 shares.
Union Bank of India touched an intraday high of Rs 219.20 and an intraday low of Rs 215. At 09:51 hrs the share was quoting at Rs 218.45, up Rs 6 or 2.82%. It was trading with volumes of 48,589 shares.
Bank of Baroda touched an intraday high of Rs 742 and an intraday low of Rs 731.05. At 09:51 hrs the share was quoting at Rs 736.30, up Rs 16.15, or 2.24%. It was trading with volumes of 14,008 shares.
State Bank of India touched an intraday high of Rs 1,929.85 and an intraday low of Rs 1,901.65. At 09:51 hrs the share was quoting at Rs 1,917.20, up Rs 50.25, or 2.69%. It was trading with volumes of 114,470 shares.
Indian Overseas Bank touched an intraday high of Rs 97.40 and an intraday low of Rs 95.90. At 09:51 hrs the share was quoting at Rs 96.85, up Rs 2.45, or 2.60%. It was trading with volumes of 15,806 shares.
However, BSE Banking Index was up 3.34% at 11,341.86.
World stocks rally on euro rescue plan; euro still down
U.S. stocks rallied on Wednesday on news that euro zone leaders plan to boost the power of the region's bailout fund, while the euro fell as investors awaited details that will not be forthcoming until next month.
Europe's leaders intend to multiply their rescue fund fourfold to one trillion euros and press Greece's creditors to accept losses of over 50 percent on their bondholdings, a draft statement from an emergency summit obtained by Reuters said.
Financial markets rose and fell in a roller-coaster session that was driven by speculation and lack of news from Brussels, where leaders of the European Union were meeting to hammer out a solution to the two-year-old sovereign debt crisis.
Oil prices fell as concerns about U.S. inventories added to caution about Europe's ability to address the debt crisis, while U.S. Treasuries, a traditional safe haven, also fell as the stock market rallied.
U.S. and European equities initially rose 1 percent before losing gains and then staging a rebound. Gains on the tech-rich Nasdaq were held in check by a 13 percent plunge in shares of Amazon.com after it provided a disappointing outlook.
The Eurogroup of finance ministers will be asked to finalize the terms and conditions for how the rescue fund, the European Financial Stability Facility, will operate under the leverage schemes in November, the draft statement said.
