Back to the City

DUSTED OFF The Magazine delves into the archives

At the beginning of BBC Two's City season, Declan Curry casts an eye back 45 years to the Square Mile as it was, with the help of a landmark series of films newly released onto the BBC Archive.

It's almost a "Life on Mars" moment.

The Governor of the Bank of England is on television. It's an important interview. The tone is grave.

He's talking about the Bank's role in providing stability to the financial system.

But wait. This is not 2009.

It's 1964.

The governor is the 3rd Earl of Cromer, not today's Mr Mervyn King. And the interview is in glorious - er - monochrome.

There has been a whirlwind of change in the Square Mile - all in our lifetime

It was part of a series of programmes broadcast by BBC Television in the 60s, looking at the City and its inner workings. They are now available for us to view again, on the BBC website.

In the intervening generations, some things have changed. TV programmes are now in colour. You don't need a television set to watch them.

And the City they illustrated has been transformed.

Actually, "transformed" doesn't quite capture it. There has been a whirlwind of change in the Square Mile - all in our lifetime.

Departed businesses

The people who work in the City come from a wider social background. They hail from a more diverse range of cultures and communities.

The companies have changed. Some historic businesses have died out. Others keep old British names above the front door but the business inside is owned by well-endowed foreign financial giants.

The City before the big bang was unrecognisable

Only a few remain as British companies - and even those are likely to have large international investors behind them.

The skyline has been redrawn. In the programmes, you can see some of the early 60s office blocks. Since then, iconic constructions like the old Stock Exchange Tower, the NatWest Tower, the Lloyd's building, the Broadgate development and the "Gherkin" have provided architectural signatures for successive ages.

The geography has shifted. Not all the City's business is done within the traditional Square Mile. Banking and share dealing has tilted eastwards, to Canary Wharf and Docklands. Hedge funds and private equity investment vehicles set up camp further west in the plush, hushed streets of Mayfair.

Even the way the City does business has changed - utterly.

Men only

Sweeping reforms to the law and a bonfire of old practices - known as "Big Bang" - made share dealing more open and flexible. Changes in technology made all manner of transactions faster and cheaper.

Just one small example demonstrates the size and scale of the changes. If you were to record another in-depth look at the City today, you wouldn't dream of using the title from the 1960s series.

Then the City was an exclusively male preserve

You would not call it "Men and Money".

That's not because of political correctness. It simply isn't accurate any more.

For that we can thank Susan Shaw, Muriel Wood and their colleagues. They were the first women allowed onto the Stock Exchange's trading floor - something that didn't happen until March 1973. It was a historic event then - today it's just ancient history.

Even the role of the governor - and the Bank he oversees - has altered significantly in our lifetime. While the Bank is no longer the chief regulator for the banking industry, it now has the power to set interest rates.

That responsibility jars with the programme's commentary, which notes that the task of setting interest rates was too important to be decided by the Bank alone.

Shifting attitudes

That says as much about changing economic beliefs as it does about the Bank's operations. In the intervening generation, the economic lever used by policy makers has switched from controlling public spending to limiting wages (voluntarily - with solemn and binding agreements), to constricting the money supply, to pegging the pound's value against European currencies, to targeting inflation.

And the politicians' attitudes towards the Bank have shifted too - from Harold Wilson's threats to call an immediate election if the Bank opposed his spending plans in the 1960s to today's view that the Bank should make one of the country's most important economic decisions, entirely free from political pressure.

The Bank of England looks the same but its powers have changed

But the more that changes, the more stays the same.

The images in the programmes are from a bygone era, but they retain a familiar tinge.

You won't see people in top hats or bowlers in the City's streets any longer (well, not many of them). The overly-branded waterproof jacket has replaced the black, furled-up umbrella.

The Stock Exchange hasn't had traders standing around on a dealing floor for more than two decades. The jovial conversations between jobbers and brokers have been replaced by electronic pulses between computer terminals.

Interest rate decisions are distributed electronically - financial companies do not need to send their clerks to wait in the Bank of England's front hall.

Greater openness

But it still has its messengers, dressed in their pink frock coats.

And the Stock Exchange and the Bank of England remain critical institutions in our economy. Today's financial crisis has rammed that point home.

The Bank - as the programme put it back in 1964 - still has a finger "in every financial pie". It intervenes in the markets to control the flow of money, to service the government's debts, and to provide financial stability.

The public now knows much more about what happens in the City

For some - the most importance change since the 1960s has been the City's greater openness.

Owning shares is no longer the exclusive preserve of the wealthy and well-connected. Millions of us own shares in our own name, or through our pension savings, giving us a stake in the nation's economic growth.

Openness also allowed a flood of foreign money into the City, restoring its position as a global financial centre.

The extent of foreign investment has been so great the City is occasionally referred to as our financial "Wimbledon" - we don't own the prizes any more, but we still benefit from staging the tournament. That openness, however, also exposed it to worldwide financial shock.

But the most visible example of openness is the City's people.

The background of the top officials has changed somewhat. The Bank of England Governor in 1964 was Lieutenant-Colonel George Rowland Stanley Baring, 3rd Earl of Cromer, offspring of the famous banking family, Barings.

Today's Governor is Mervyn King, noted academic at Cambridge, Birmingham University and the London School of Economics.

But it is wider and deeper than that. The City's supporters claim that - with some high-profile exceptions - gender, skin colour, creed, ethnicity or sexual orientation are broadly irrelevant. So too, they say, is your school or the pattern of its tie.

The City is driven by merit - what matters is your ability to be smart and to make money.