Black Wednesday was the 1992 European currency-crisis day when the British pound left the Exchange Rate Mechanism.
On 16 September 1992, the British government announced that sterling would be suspended from the ERM after intense pressure forced it to abandon attempts to keep the currency within its permitted band. The episode damaged confidence in the government’s economic policy and produced heavy losses for speculators and central banks.
The ERM was designed to limit exchange-rate fluctuations among participating European currencies and was an important predecessor to the euro. Britain had joined in 1990, but economic conditions and interest-rate tensions made maintaining sterling’s position difficult.
Black Wednesday was primarily a currency and financial-market crisis rather than a conventional stock-market crash. It belongs in crash histories because it caused a dramatic market upheaval and demonstrates that major market failures can center on exchange rates rather than share indexes.