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Finance and the City

Tony Norfield’s new opus The City takes on a big subject and makes it, well – big. Of course, a proper appreciation of the City requires an understanding of global financial markets. But some readers may find the detail provided a bit weighty.

Others will delight in the sheer depth of factoids they can absorb and recycle to their city dealer friends. The description of why most international trade is in dollars is readable and entertaining. This book gives you the entire picture whether you want it or not, but tt is not a light read, nor does it contain many tasty anecdotes of misdeeds or fortunes won and lost.

Once you have accepted this, you are treated to some handy insights about the economics of the British Empire and about the postwar restrictions on US banks which spurred the development of London as a Eurobond market.

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How many of us knew that the UK led the way in removing exchange controls in 1979 and liberalising the market with Big Bang in 1986? The former was intended to increase foreign investment income, and both combined to achieve a great deal more than that.

With tighter editing, this book would have flowed easier without taking away from its intellectual completeness. Sometimes you feel like you are working your way through a university treatise, such are the discursive signposts about what this book is and is not about. And there is plenty of indulgent authorship, with passages inserted not because the reader seems to need them, but because the writer wants to put them in.

But then the story lightens up, and you are treated to a fascinating account of how the US Treasury tried to strong-arm the UK – in the shape of Barclays – to buy Lehman Brothers before it went bust. Luckily, the then Chancellor Alistair Darling ‘smelt a rat’ and declined the poisoned chalice.

The surprise of this book, authored by someone who worked for years in different City jobs then elevated themselves to the ivory common room of academia, is the faint whiff of disapproval that surfaces infrequently like a strata of unyielding rock. It is surprising and also fun at some points. Who knew that the UK’s decision not to join the European Monetary Union in 1992 was negotiated in order to give “a freer hand to downgrade employment conditions”?

Some readers may agree with these sentiments and some may find them irrelevant to the reason they picked up the book in the first place – to understand the City better and enjoy the process. But despite these quibbles, The City offers the reader much that is fresh and interesting. It has all the hallmarks of a book where the author has done bags of primary research and, in doing so, has cast a new perspective on a well-researched subject.

William Clutterbuck is vice chairman of Maitland