The 1992 European currency crisis caused by pressure on the Exchange Rate Mechanism was nicknamed Black Wednesday.
Black Wednesday occurred on September 16, 1992, when the United Kingdom withdrew the pound sterling from the European Exchange Rate Mechanism. The system required participating currencies to stay within agreed exchange-rate bands, but market pressure made the pound’s target increasingly difficult to defend.
The Bank of England raised interest rates and intervened in currency markets, yet speculative selling continued. The British government eventually suspended the pound’s ERM membership. The episode badly damaged the government’s economic credibility, although it later allowed interest rates to fall and the pound to trade more freely.
Black Wednesday is a currency crisis rather than a conventional share-price crash. It is also distinct from Black Monday in 1987 and Black Thursday in 1929, names associated with major stock-market turmoil.