John Kay

The political and regulatory incentives are either to downplay risks or exaggerate them – or to do each at different times.

In the unlikely event that the G20 leaders can spare a few moments between photo opportunities and ritual denunciation of greedy bankers, they might give urgent attention to the question of how to extricate themselves from the underwriting of failed banks.

If you want to understand how the City came to play such a central role in British economic and political life, why a crash was inevitable, and why the crisis is being resolved on terms which give so much and ask so little of the financial sector, this is the most important thing you need to understand: the influence of investment banks on modern politics and policy.

Our leaders blog, twitter and consult focus groups. But these developments do not make society better governed.

Power is a duty, not a prize, is probably the most important reason why some countries in the world are rich and others poor. The point needs to be brought home in equal measure to legislators, chief executives and bankers.

Values of integrity, of public service, and of responsible stewardship of the money of others can never be replaced by rules or imposed by regulation.

We trust the pharmacist not because we bank on his or her self-interest, but because we are confident that it will be tightly restrained. In part, we rely on the long-run self-interest of the pharmacist in protecting his or her own reputation.

It is true that professional reputations are not what they once were, that self-regulation of standards of competence has often been inadequate, that professions’ ethical standards have declined generally. But it is also striking that such decline is most noticeable in the areas of law and accountancy closest to financial services.

Dishonesty of speech quickly leads to dishonesty in behaviour because the language we use governs all we do.

Few things corrode business efficiency and effective markets more insidiously than the discovery that it is more profitable to win the favour of politicians than to win the approval of customers.