Thatcher's 'Big Bang' Free-for-All Led to Bust

The British regulatory reforms that changed the face of the financial industry in the '80s allowed banks to become bloated giants, two architects of the so-called "Big Bang" changes tell the Wall Street Journal. The deregulation let London's financial sector flourish, the men say, but also allowed banks to become too big for even their managers to properly regulate, setting the stage for today's crisis.

The former officials, both now members of Britain's House of Lords, are skeptical of G20 efforts to expand financial regulation to cover today's complex financial system. A more effective course, they say, would be to split banks into the separate business they used to be, and keep commercial, deposit-taking banking operations apart from the riskier business of securities trading.
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