One of the more mind-bending concepts behind Big Bang theory is that not only is the universe continuing to expand but that the rate of this expansion may be accelerating. The same is true of the impact of Big Bang in the City of London, the somewhat less cosmic explosion which took place 20 years ago this week.

There is no question that the apparently parochial changes to the rule book of the London Stock Exchange, under the threat of an investigation into restrictive practices, triggered a series of changes which – albeit unintentionally – transformed the City of London into a global powerhouse. Combined with the end of foreign exchange controls in the late 1970s, the changes at and around Big Bang created the perfect petrie dish in which the dominant themes that have shaped the securities industry over the past 20 years could flourish: the globalisation of capital, the lightning growth of the derivatives markets, the triumph of the integrated investment bank and the dominance of the Americans. What is less clear – particularly when looking back with awe at how far we have come and how clever we must be – is how much further these changes have to run. And, just as the original Big Bang has a darker side in that eventually the universe may contract to its original size, so too is there a darker side to London's Big Bang. For all that the industry has gained in size, wealth and sophistication, how much has it lost in terms of ethics and integrity? The unimaginable scale of change since Big Bang – and since the deregulation of the US markets a decade earlier – can trick us into underestimating the nature and scale of likely changes in the next 20 or 30 years. Turnover in UK equities has jumped from £105bn in 1985 to £1.8 trillion last year. No doubt in 1985 the jobbers and brokers on the floor of the exchange thought the market was as busy as it could practicably ever be – remember, trading and settlement was paper-based. The growth is even more astonishing in derivatives. Since deregulation in the US in 1976, derivatives trading volumes have soared 140-fold from $32bn to an estimated $4.5 trillion this year, mainly in products that had not even been conceived until a decade ago. Global volumes will reach about $12 trillion this year, some 50 times higher than in 1985. Applying these growth rates to the next 20 years is another mind-bending exercise. Trading volumes on the LSE would reach €48 trillion – the UK will probably have joined the eurozone by then – and global derivatives trading volumes would be approaching $660 trillion – roughly 10 times today's global GDP. While it may seem absurd to contemplate such numbers, it is equally absurd to assume the rate of change should start to slow. The top five trading firms on the exchange before Big Bang have disappeared – long-dormant Wedd Durlacher was legally dissolved only last month. There is no reason to suggest that the top five investment banks in the world today – Goldman Sachs, Morgan Stanley, JP Morgan, Citigroup and Merrill Lynch – should be around in 20 years and certainly not in their present form. The dominant disruptive influences in financial markets – risk management and derivatives, hedge funds and private equity, technology and communications – are in their relative infancy. Most market structures – exchanges, clearing and settlement, regulation, national borders, any form of manual intervention – are riddled with inefficiencies that are only beginning to work themselves out. As these trends conspire, the 20th anniversary of Big Bang may turn out to be little more than a brief pause for breath at the start of the most mind-boggling period of growth the securities industry has seen. But at what cost? One of the recurring themes in discussions with veteran bankers and brokers in the past few weeks has been that the industry may have lost at least some of its soul along the way. Even allowing for a degree of rose-tinted hindsight, a strong case can be made for a decline in the overall level of integrity and ethics in the business. The most immediate practical effects of Big Bang in 1986 were the disappearance, almost overnight, of the personal contact and clubbiness of the stock exchange floor (it limped on a for a few weeks), the death of most of the self-regulating partnerships as they sold up, which together introduced a level of hyper-inflation in City pay and bonuses, and hence greed and expectation, not seen since the 1920s. Of course, sharp practice and rule-breaking occurred on the old floor – but in today's anonymous market, when the rewards are so much greater and you don't have to look someone in the eye as you rip them off, it is a less-painful moral dilemma to stretch or break the rules. There are many who believe that levels of personal probity and integrity have fallen inversely in relation to the growth in the industry since Big Bang and that only the uneasy trade-off of tighter and costlier regulation has stopped the industry descending into chaos. Albert Einstein, who knew a thing or two about astrophysics, might have been on to something when he warned that it had become appallingly obvious that our technological progress had exceeded our humanity.