Would London be the financial capital of Europe today if Big Bang had never happened? No, say today's City grandees.

The disappearance of the closed shop, old-boys network that controlled the Stock Exchange up to 1986 and kept everybody in their place was an essential precursor to London's emergence as a major financial centre, they say.

Without that, the open, competitive, low cost system that accommodates everyone from institutions chasing multi-billion pound international mergers and acquisitions down to small private investors looking to generate a nest egg would not have come into being.

Nic Stuchfield, director of corporate development at the London Stock Exchange, said Big Bang completely transformed London.

The Square Mile had consisted of quite small firms, with workers almost exclusively British, all male and all from similar sorts of backgrounds.

"Now London is a global magnet, people come from all over the world to work here," he said.

The LSE with its first female chief executive Clara Furse, who was born in Canada to Dutch parents, is a prime example of how the City has changed, he said.

"Here at the LSE we are at the cutting edge of Europe," Mr Stuchfield added. "We are growing faster than any other major exchange."

The exchange was making "major strides" in turning London into the financial capital of the world, he added.

Peter Thomson, chief executive of investment firm Taylor Young Investment Management, said the biggest change has been that of ownership.

"Following Big Bang, there was a great movement of international business into the UK market," he said.

"This set London up and stabilised it as a financial centre worldwide."

This can be seen even in the physical appearance of London.

"The change in the skyline over the past twenty years is due to the capital investment that has flooded into London," Mr Thompson said.

"On the global stage we have been pretty successful. We have established our success as the European financial capital."

With the old boy’s club vanquished, London’s image is now of "a highly efficient way to drive capital around", he added.

But the trade-off is a decline in personal relationships.

"I think it’s significantly more sterile in terms of relationships. The market has become a very sophisticated process from which individuals are quite some distance.

"There is also more emphasis on a dash for profit versus steady longer term decision making. There is more of a need for instant gratification."

Mr Thompson's latter point is, of course, unwelcome in some quarters.

City veteran Peter Meinertzhagen who founded stockbroker Hoare & Co in 1965 and who will retire as chairman of ABN Amro Hoare Govet next March, is critical.

"I worked for 20 years before Big Bang and 20 years after," he said recently. "The greed to make money is now very high up the agenda. It is much worse than it ever was."

George Lynne, from PSigma Investment Management, said American involvement saved London from losing out to Frankfurt as the European financial capital.

Mr Lynne, a 64-year-old stockbroker who started out at 17, has seen the changes first hand. "Under American and European influence professionalism improved enormously," he said.

Douglas McWilliams, of the business consultancy CEBR, said that not only has the City been transformed but the entire UK economy.

"The City post Big bang has taken over the historic role of Britain’s manufacturing industry in paying for our imports," he said.

Although this is dependent on a small number of high-earning professionals which has led to a society with huge variations in disposable income "without the City everyone in the UK would be worse off", he said.

Gay Collins, managing director of financial PR agency Penrose Financial, said Big Bang "shook up the old order and allowed new interests into what had been a fairly closed shop".

She went on: "Big Bang broke down the barriers to competition in the City and left many firms fighting to survive. In this more dynamic marketplace companies began to realise that their brand was the key to success and that this had to be proactively built and protected.

"Those firms who believed they could rely on their established place in the City’s pecking order were the ones who inevitably disappeared or were taken over."

She added that Big Bang was also an important factor in the growth of the financial PR industry as it created the competitive environment where firms had to invest in brand management.

"From being virtually non-existent 20 years ago PR is now a multi-million pound industry which itself plays a very important role in the City’s continuing success," she said.

Earlier this week, Nigel Lawson, who was Chancellor at the time of Big Bang, warned that high taxes and heavy-handed regulation under Chancellor Gordon Brown threatened to undermine the legacy of Big Bang.

Writing in a pamphlet, Big Bang 20 years on, Mr Lawson said: "There is no reason why London should not remain the world’s premier truly international financial centre.

"But the over-riding characteristic of the global economy in which we now live and work is that it is unforgivingly competitive, and with the emergence of the new economic giants of the East set to become increasingly so.

"It is Britain’s good fortune that its most successful industry is one of the fastest growing on the planet. But it is also one of the most mobile.

"We need to learn the lessons of the past 20 years since Big Bang and, while celebrating a notable success, take care not to take it for granted."

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