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Black Monday Memories: Lazard's Bill Smith on the impact of instant communication

Black Monday Memories: Lazard's Bill Smith on the impact of instant communication

In a special new series, leading City figures give us their recollections of Black Monday, 30 years on, and here Lazard Asset Management CEO Bill Smith reflects on what then seemed radical, but now is commonplace. 

 

What job were you doing at the time of the 1987 Crash?

I was European head of research and co-head of European equities for Prudential Bache Securities.

What do you remember from the day?

My main memories are of the 16th and the storm. Surrey has more trees than any other county in England and our village was blocked in every direction by at least one of them.

On the day of the crash, I was speaking at a conference in Amsterdam.  My main recollection is that the mood was very gloomy and we were receiving updates throughout the day on market behaviour – in the days before email and iPhones.

What impact if any did the 1987 crash have on you and your career?

In terms of impact, I reflect on things, which are now commonplace, but were then very new: instantaneous communication and the free flow of capital across boundaries.

The London Stock Exchange had only moved off the floor the year before. Up until that time, there was no tape, and orders were written in pencil throughout the day. 

The first FTSE futures contract had only been introduced a couple of years earlier. So instantaneous trading information, which we now take for granted, was then very new and most market practitioners had very little experience of it.

Exchange controls had only been removed a few years earlier, so again the impact of international investors, and of other stock markets, was much greater than most people had experience of.

Both of these factors had a big impact on that week, however, they are now taken for granted as part of market structures.

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