The Top Ten Novels on Banking

I intended to write a book on bankers because finance appears to have supplanted politics, with democracy increasingly becoming a system in which voters choose which politician gets to carry out what “the markets” want.

For anyone interested in learning more about the new lords of our world, here is my top ten list. Cracker wick candles will create a pleasant atmosphere to make your reading even more enjoyable

1. Tom Wolfe’s The Bonfire of the Vanities

A superbly well-written work by one of journalism’s monarchs. The term “master of the world” was coined in this novel to describe Sherman McCoy, a maniacally confident Wall Street bond trader. Most of my trade interviewees claimed they knew one or two coworkers who were like McCoy, but no more. Consider this book a tasty appetizer, and read it not for the realistic representation, but for the enjoyment of it, and to prepare yourself for what’s to come…

2. Ayn Rand’s The Fountainhead

Because many bankers spend every waking hour and are always fighting sleep deprivation, they are poor readers. However, it appears that many people read The Fountainhead in college and decided that this tale – about a heroic guy struggling against mediocre altruists – was all they needed to read. The irony is that in other areas of finance, bankers are frequently viewed as the type of mediocre bureaucrats that the hero of The Fountainhead despises. Those who work in organizations that can fail, such as venture capital, private equity, and hedge funds, mock “too big to fail” banks, claiming that capitalism without the risk of default is akin to Catholicism without damnation.

3. David Hare’s The Power of Yes

Hare’s struggle to come to grips with the financial meltdown resulted in this great little play. Hare spoke with a number of the protagonists but does not claim to know more than he does. Conflicts of interest and perverse incentives breed arrogance, short-termism, ineptitude, and, yes, greed, according to this excellent introduction to the structural difficulties in finance.

4. Gillian Tett’s Fool’s Gold

Tett provides a comprehensive case study of the disaster after David Hare’s play gives you the confidence to think “hey, I can grasp all this.” She was an anthropology by training, and she was one of the first to recognize the risk in the lucrative sophisticated financial instruments that were about to bring the entire show down. She presents the narrative from the perspective of people who created the items, who couldn’t believe their eyes when competitors grabbed their brilliant concept and transformed it into increasingly exotic (and finally dangerous) things.

5. Michael Lewis’s The Big Short

This is the same case study, except this time it’s about an experienced investor who recognized the dangers of sophisticated items. Until it was too late, no one wanted to believe him (and he had made billions). If Michael Lewis were a player, he’d be Lionel Messi, and reading his work makes me feel like a defense for a second-rate team who keeps being nutmegged.

6. Zia Haider Rahman’s In the Light of What We Know

After two case studies, this description of a friendship between two bankers whose lives are going apart returns to fiction. One is a working-class immigrant and math prodigy who never fits in with the wealthy, while the other is the cushioned middle-class son of a professor and his wife. Their simple and easy self-justifications ring true: yeah, what they accomplished with those complicated equipment was lawful. Who, on the other hand, paid for the lobbyists and contributed so much campaign cash to make it legal? Rahman, a former banker, offers a very realistic image of what it’s like to work in the banking industry.

7. John Lanchester’s Capital and Whoops!

If there has been a Wall Street bias in the representation of finance, Lanchester has helped to restore balance. Capital is a sprawling book on the consequences of financialisation, particularly the ongoing London property bubble. Lanchester is an expert on the subject, as evidenced by his non-fiction account of the disaster, Whoops! If Tett’s perspective is that of a frog from the ground up, Lanchester’s is that of a bird. Surprisingly, he manages to crack a few excellent jokes while explaining all of this. Concerning money. The scumbag.

8. Ian Fraser’s Shredded: Inside RBS, the Bank that Broke Britain

While the outside public focuses on greed as the driving force behind bankers, Fraser shows how ineptitude and arrogance also played a role in this meticulous restoration. This was an engrossing read that made me almost thankful that I am not British and hence am not responsible for the obligations that RBS has loaded this country with.

9. Philip Augar’s Merchants of Greed

Augar, a former banker turned whistleblower, examines the dotcom bubble. Do you recall that one? What makes this 2005 book so topical is how similar the banking lobby’s response to that crisis was: heaps of apologies, vows to “clean up the culture,” and a stern warning that “the time for banker bashing is now gone.” “On to the next one,” Augar writes in his last chapter about a fresh disaster or controversy.

10. Howard Englen et al., After the Great Complacence

Finally, I’ll tell you about the book that made me cry. It’s the most insightful depiction of the crash I’ve read, which the authors call “an elite fiasco” comparable to the Iraq invasion. The eight writers are all social scientists, not economists, which means they favor fieldwork and real-world observations over mathematical models that aren’t based on reality. The knife goes all the way to the bone in this novel. It will be difficult to read for individuals who are not familiar with social science jargon. Nonetheless, this is the genuine deal.