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George Soros

Original nameGeorge Soros

"The Man Who Broke the Bank of England," legend of the macro hedge fund

Those Who Made Money Beget Money · Capital & Finance
Hedge FundCurrency SpeculationReflexivityContemporary

Who they are

A Hungarian-American investor, founder of the Quantum Fund, one of the most famous macro hedge-fund managers. He put forward a distinctive theory of "reflexivity," holding that market participants’ perceptions and the market itself shape and distort each other, so markets are often far from rational or in equilibrium. In 1992, judging the pound overvalued and bound to leave the European exchange-rate mechanism, he shorted it massively, finally forcing the British government to give way and the pound to plunge — a single trade said to net a billion dollars, earning him the name "the man who broke the Bank of England." He is also an active and controversial philanthropist and political funder, and because of his vast influence has become the object of many conspiracy theories — this site states his genuine place in financial history and clearly distinguishes it from conspiracy theory.

Primary sourcesSoros, The Alchemy of Financesources on the 1992 sterling crisis

Key stories

The Day He Broke the Bank of England

In September 1992, convinced the pound could not hold its overvalued rate, Soros shorted it wildly with huge leverage. The British government desperately raised interest rates and spent reserves to defend it, but could not stem the flood of selling, and was finally forced to pull the pound out of the European exchange-rate mechanism and devalue sharply. The day was Britain’s "Black Wednesday," and Soros is said to have netted about a billion dollars from the one trade — a speculator who beat a nation’s central bank.

Version differences

Soros has become the object of many conspiracy theories for his influence and political funding, much of it exaggeration and fiction; this site states his genuine place in financial history and clearly distinguishes it from conspiracy theory.

Relationships

Ally
🪙Warren Buffett　the two most famous contemporary investing styles: macro hedging and value investing

Echoes today

Below are how modern works borrow or reinterpret this name or story — not the original material. The two differ, so keep them apart.

"The man who broke the Bank of England"Soros’s 1992 shorting of the pound forced Britain out of the European exchange-rate mechanism, earning him the name "the man who broke the Bank of England"; his theory of "reflexivity" is also an important lens for understanding market irrationality.
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