Whoops! review

Novelist John Lanchester reveals how his new book, Whoops!, breaks down barriers between the financial sector and the rest of us

The Knowledge
The Knowledge

In John Lanchester’s witty, forensic and accessible analysis of the recession, a key conclusion seems to be that bankers forgot how to bank. Novelists would rarely make such bold statements about the unfamiliar world of finance, but Lanchester is different. ‘Nobody is born with an understanding of credit default swaps, but I didn’t feel it should be completely alien to me,’ he says.

‘Part of the reason I can write about this is that my dad was a banker. If he’d been a fishmonger, I’d have opinions about fish.’ Lanchester was already researching finance as background for a novel when the credit crunch happened. ‘In fiction you research things to leave them out.

You have to know about things to not write about them. I’d written about companies – Google, Microsoft and Murdoch – for the London Review of Books and my editor suggested I did something on banks.’
That piece, ‘Cityphilia’, came out after British bank Northern Rock collapsed. It hit a nerve (‘I was lucky with the timing,’ says Lanchester). ‘Cityphilia’ led to ‘Cityphobia’, which took in the Lehman Brothers crash, then Lanchester realised he had the makings of a book, a project he could work on while the novel sat in his drawer awaiting a final polish.

In Whoops!, he deals well with the off-putting enormity of the numbers (‘a million seconds is less than 12 days; a billion is almost 32 years’) and although there is abhorrence at the waste and stupidity, there’s also an impish humour that means Lanchester is never in danger of resorting to homily. At the centre of the book is a tale of risk and greed and how they can combine to make staggering, terrifying numbers. The problem was that unregulated bankers developed new formulas to manage risk, and then found they were experiencing losses that, according to their calculations, should have had the equivalent probability ‘of winning the UK National Lottery 21 times in a row’. We now realise that their calculations were wrong, but nobody understood this at the time: they just thought they were unlucky.

Lanchester says he is trying to break down the barrier between two cultures: the financial services and the rest of us. ‘I’d come to feel very strongly about the subject, and felt it was important to communicate across the culture gap,’ he says. ‘The fact that people didn’t try to communicate is the reason we got where we did, because it allowed the banks to make up their own rules. I thought I should do anything I could to change that.’

Now in the aftermath of the recession, ‘it’s like nothing has changed’, he says. Bankers are paying themselves vast bonuses and massive debt-financed corporate takeovers are back in vogue. Can the culture change?

Lanchester isn’t sure. ‘Around half of bankers are ideologically committed to this,’ he says. ‘They believe in dog-eat-dog, they think it is better to have winners and losers, it’s better to have the extreme rich and obscene bonuses, because that is what motivates people; the other half don’t care at all.’ Lanchester anticipates ‘brutally divided politics’ as nations try to pay back the debt. And even as this happens, the underlying problems aren’t going away.

‘Bankers feel reviled. They also feel misunderstood. What happens when this happens again? All the structural problems are still unfixed and these catastrophes are happening at regular intervals. What politician will be able to say, “Sorry, we need another £100 billion bailout”? This cultural gap is going to be expensive. But at the moment everyone is behaving as though the idol has fallen off the pedestal but then they’ve polished it, stuck on some Sellotape and put it back up.’
Whoops! is published by Penguin

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