Walter Bagehot, the Literary Banker

Spend some time with masters of finance over a few glasses of whiskey and you may detect a curious streak of mysticism running through these apostles of the empirical, these obsessive quantifiers. Often they stray into metaphor when explaining cold calculation; they may speak of the market in terms of the currents of history or the spirits of the vasty deep. They’re fully aware that finance is tied up with intangible, mysterious elements that can scarcely survive scrutiny. The U.S. dollar, the basis of the world economy, was once backed by gold. Today it is backed by . . . nothing. A bank like Lehman Brothers can be a pillar of the community today, then collapse overnight. Bankers listen eagerly to the music of the spheres.