What happened
The Big Bang — named for the detonation of regulations on 27 October 1986 — was justified as making London competitive with New York. It did. It also made London the leading centre for financial products of spectacular complexity and minimal social value.
By removing the distinction between commercial and investment banking, and by allowing financial firms to take enormous leveraged positions, the Big Bang created an incentive structure where risk was systemically mispriced. Bonuses rewarded short-term trading; nobody was accountable for long-term systemic risk.
The 2008 financial crisis, which cost the UK £500 billion in bank bailouts and triggered a decade of austerity affecting millions, had its roots in the deregulatory ideology established in 1986. Thatcher's government didn't just fail to predict this — it actively dismantled the regulatory architecture designed to prevent it.