The crash of 1987 was a spectacular event of financial destruction that shook the foundations of global markets, brought the weakest to their knees, and gave many of those involved a lesson in extreme events that has informed their professional lives ever since. David Wigan talked to a few industry veterans about that dark day in October and the impact on the industry.
he market rout started in mid-October and culminated on
October 19 on what became known as Black Monday, a day that
saw some of the biggest falls on benchmark equity indexes
ever recorded. The Dow Jones Industrial Average dropped a
record 22.6% in one day, and by the end of the month indexes
in Hong Kong, Sydney and London had dropped 46%, 42% and 26%
With the benefit of hindsight the huge dislocations were
caused by a perfect storm of rising interest rates,
Middle-East unrest and the end of a multi-year bull market
which had seen stock prices triple since 1982, all
exacerbated by new and barely understood computer-driven
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