George Soros became famous for profiting from Britain’s 1992 Black Wednesday crisis.
On September 16, 1992, the United Kingdom withdrew the pound sterling from the European Exchange Rate Mechanism after intense pressure in currency markets. The government had tried to keep the pound within its permitted band, including by raising interest rates, but the policy became unsustainable.
Soros’s Quantum Fund had built a large short position against sterling. When Britain left the mechanism and the pound depreciated, the fund made an often-cited profit of about US$1 billion. Soros was consequently nicknamed “the man who broke the Bank of England,” although market pressure came from many traders and institutions rather than one person alone.
Black Wednesday damaged the government’s credibility but later allowed Britain to cut interest rates and pursue a more flexible exchange-rate policy. The event is distinct from the 1997 Asian crisis, which began with Thailand’s baht devaluation.