Mervyn King likes to begin his speeches with a question about numbers. He did so at the Mansion House this year. So let me follow his example. Who can turn 25,000 into 420, with a touch on his keyboard? With Mervyn King you have to concentrate through to the end of the speech before you get the answer. Mine will come sooner.
When he sat as a member of Her Majesty's Brown government, Lord Myners was something of a thorn in the side of the bankers. In the War of Fred Goodwin's Pension, an epic struggle, he was on the side of the angels. But, now that St Vincent de Cable has inveighed against gamblers and spivs, Paul Myners seems the voice of sweet reason by comparison.
He chaired a debate between me and Lord Peston of Today (and all other BBC programmes) at the LSE recently on the causes of the crisis. The shameless aim was to sell copies of a book I have just published called The Financial Crisis: Who's to blame?.
My thesis is that this has been an unusual crisis. Normally, when a disaster strikes, whether natural or man-made, we begin with a range of more or less plausible hypotheses about its origin; then, as we learn more, opinion tends to converge on a central narrative. The opposite has been true this time and as time passes there are more and more competing explanations on offer. In the book I catalogue 38 of them.
Why bother? My argument is that without a clear understanding of what went wrong we risk devising solutions to non-problems, while neglecting the most serious questions. The EU's Hedge Fund Directive is an example of the first phenomenon: the lack of action on global imbalances is a vivid illustration of the second.
The three of us batted explanations back and forth cheerfully for an hour or so. Robert Peston would give bankers' bonuses a higher weighting than I do. Paul Myners attaches greater significance to the lack of attention paid by fund managers and shareholders to what is done on their behalf by the management of banks. I have already found another dozen explanations for the second edition.
Which brings me to the question, and the numbers: 25,000 was the rough ranking of my book on Amazon's bestsellers' list before the debate. (It's an academic publisher, so that's not a huge surprise.) Robert Peston mentioned it, neutrally, in his blog the next morning. Within hours, it was up to number 420. So knowing what Robert Peston is reading would be more use to bookmakers in the Far East than forecasting no balls by Pakistani bowlers. He is becoming the Oprah Winfrey of the UK.
There is a lot of anxiety in the City about the future of London as a financial centre. The league tables still show London jostling for the top spot with New York. But a combination of higher tax rates, gold plating of EU directives, hostile political rhetoric and a confused regulatory restructuring (reform seems too strong a word to describe what the Coalition plans) could soon have an effect.
Geneva now seems the favoured option for tax exiles so I went to have a look. I called in on the head office of the World Economic Forum, a stylish modernist construction, magnificently perched above the lake. Though most people think of the World Economic Forum as the outfit that organises a big party in Davos each January, in fact it has become a kind of global think-tank, producing some good, and some less good, ideas for solving the world's problems.
There was some evidence of new arrivals from London, though not yet on a large scale. But the most striking thing was just how well the Swiss economy has recovered. Two years ago, Switzerland and the UK were seen in the same penalty box: two countries with heavy reliance on the financial sector and some high-profile and costly casualties. For RBS read UBS. Now the contrast is dramatic. The economy is forging ahead, and all the talk is of skill shortages. Why? One key reason is that fiscal policy was never allowed to career out of control.
Of course, some of our banks did crass things. But the reason we now face years of austerity is because public spending rose as a percentage of GDP from near the bottom of the OECD league to near the top between 2000 and 2007. The Conservatives and Liberal Democrats find it hard to acknowledge that, since their voices opposing the expansion were somewhere between pianissimo and silent at the time.
So what happens to economically developed Western cities when they go into decline? To answer the question, I spent a weekend in Bruges. That city's heyday was in the 14th century when its merchants were the envy of the world. It began to decline early in the 15th century and has never been among the top dogs since.
You would hardly guess that from the state of the hotels, restaurants and shops, or from the fantastic canalside developments of the past decade. The discreet charm of the bourgeoisie is well in evidence in Bruges, sustained by hordes of Spanish and Japanese tourists.
So my tip for all those out-of-work investment bankers is to buy a canal boat in Little Venice, learn to say 'there is London Zoo' in six languages and to put her (or him) indoors to work making high-value-added chocolates at £2 a truffle. It seems to work for the Belgians.
- Howard Davies is the director of the London School of Economics.