Joris Luyendijk: 'Bankers are the best paid victims. We should hug them, not be angry'

When Joris Luyendijk was interviewing bankers, many clearly felt his deepest desire was to be them. “It’s cult-like,” he says of the City. “The macho, master of the universe type has bought into this idea so deeply: ‘I may be working 80 hours a week, I don’t see my family, and my body looks 10 years older than it is, but I am living the life. Everybody wants to be me.’”

And as in a cult, insiders were afraid to speak out, fearing expulsion. Whenever he was talking to a financier in a coffee shop and a colleague walked in, they would morph into a “shivering wreck”: “How much of a master of the universe are you if you’re afraid to give your views to a fellow citizen?”

Yet many still spoke to him. “I wondered why they would risk their jobs. Some said: ‘I am terrified about what my bank can do to society, and how it is being run’.”

Luyendijk, a 43-year-old investigative journalist, used to cover the Middle East — “interviewing real terrorists not financial terrorists”. But then he started talking to banking employees about the 2008 financial meltdown. The conversations became a Guardian blog and now a book, Swimming With Sharks. It has been so successful in his native Netherlands that he jokingly calls it “Fifty Shades of Joris”.

He wants the book to help others see past the obfuscation of the City: “It’s a fundamental misunderstanding that we’re too stupid to understand the problems of finance. A seven-year-old understands perverse incentives. Tell them: ‘Half the class doesn’t do their homework, half does and they all get the same grade; what will happen?’ That’s the bank.”

His view of the future is frightening. “We’ll continue to have ever bigger crashes, until we can no longer save the system. And then we will do what we could do now: rebuild it.” He feels little has changed in banking in the seven years since the crash. “The old mindset is intact: ‘If it’s legal, we’ll do it, and our well-paid lobbyists will ensure it’s legal’. You have these financial empires: too vast, too complex, too toxic to manage. Something happens and they blow up like nuclear reactors.”

He has two major predictions. The first is that the next crisis could be caused by terrorists hijacking banking IT systems. “They’re so vulnerable. Because banks were merging and acquiring like crazy, they glued systems together. Imagine if a bank says we can no longer access our data and companies can no longer get their money.”

The second is that the London housing bubble will burst. “It’s a when and not an if. If interest rates return to a historical average of six per cent, this city is finished. It will just go boom. Everybody knows this, just as all the [analysts] knew the subprime market in America would explode. It’s just really attractive for George Osborne to reinflate the bubble, so all the home-owning voters are happy.”

On the 2008 crisis, Luyendijk argues it wasn’t a failure of capitalism: it showed finance wasn’t really capitalist at all. “I go to the heart of capitalism and I find...” he pauses for effect. “Socialism. Because in most niches, four or five banks control the market, divide it up among themselves and they can’t go bust. Rather than going on about greed, we should make sure there are free market forces in finance again.” If the market were free, the crisis would have spawned more banks: “If a restaurant served the kind of shit that banks served in 2008, and they paid the waiters the kind of wages banks paid, you’d expect more restaurants. That hasn’t happened.”

Bankers aren’t really the enemy, though. “With globalisation, technology and deregulation, all sorts of conflicts of interest have come to exist. If you’re a banker, you’re faced with immense temptations, most of which are legal. If you don’t screw that German bank, your colleague opposite will — and you’ll be culled. Blaming people for acting on incentives is stupid.”

Incentives that still exist. “All we’ve had are these cultural sensitivity courses: begging bankers on our knees: ‘even though you can screw us — will you please not screw us?’ We keep blaming individual bankers, when we need the system to change.”

For Luyendijk, that means better laws — which must come from politicians. There is little political will, he believes, because so few people realise how close we came to economic armageddon. He also wants banks to split so they do only one activity. When banks were smaller, they could be partnerships, where partners were liable rather than the taxpayer. “This is how radically we should think.Should banks really be publicly listed? We’ve treated them intellectually as though taking oil out of the ground or selling hamburgers is the same as extending credit, but finance is different.”

Luyendijk hopes Swimming With Sharks will also dispel myths about bankers. He says most are more Tedious Tim than Jordan Belfort. “Films like The Wolf of Wall Street make us believe the problem is that they are gambling-addicted, coke-snorting, whoring cheats — the fantasy that the system is okay, but it’s the wrong people in it... If you want to know what bankers are really like, ask female bankers if they’d date other bankers: ‘Never! They’re so boring! They only talk about their jobs! They try to impress me that they can pay for dinner; I can pay for dinner’.”

He notes they can also be the type to brag about benefiting from other’s suffering. On 7/7, one trader was on the phone to his mother who was “worried about [him] dying”, while he used his second to short insurance stocks.

Critics have often called bankers “psychopaths” but Luyendijk believes they’ve got the wrong personality disorder. “Psychopaths are impulsive and spontaneous. Banking is about conformity: make these hours, be predictable. Narcissists have no self-worth, so they need a status symbol outside themselves. That can be a job, and they lose their existential validation without it.” Banks excel at “sucking in” narcissists. “They approach them at university and tell them they need never feel insecure again.”

Luyendijk says ex-Barclays boss Bob Diamond falls in this camp: “After Libor, he was given all these opportunities to say he’d failed. No: he was disappointed. He had to be 100 per cent faultless. That is not a psychopath — Bob Diamond is a classic narcissist. And he would be the worst manager you could have as how can you tell someone like that things are in danger of going wrong?”

It takes a narcissist, he adds, to accept the kind of life where your children have to make appointments to see you: “If you’re psychologically balanced, you’re going to think: ‘This is not worth what I’m doing to my family’. And that’s why they are ultimately victims because the banks squeeze out the last bit of energy, then discard them.” He points to the many ex-bankers who emerge thinking: “What have I done? I don’t know my partner or children. I convinced myself I was top of the tree and the only reason people would criticise me was envy.”

He also believes Aspergers is common in the City, especially among those building structured products — which may have contributed to the subprime mortgage crisis. “They didn’t take into account that people would lie about their income. People with Aspergers don’t lie, they can’t. If you are going to let people with such a blinkered view of reality build instruments, you’ll have gaps.”

Luyendijk believes we shouldn’t feel angry at bankers, we should pity them: “If you take an honest look at how a banker lives — whatever conversation they’re having with a loved one, they have to keep an eye on their phone — they are the best paid victims. We should hug them. They can deal with blame and reproach, but if you say: ‘I’m really sorry, but there are therapists to help you with your bonus addiction and status disorder.’ Then, they get angry.”

He wants us to acknowledge how wider society is complicit too. “The people fuming at the banks are quite likely to pay into pension funds that force banks to do this. We have power from our investment decisions. If you put your savings into the account that pays the most interest, you’ve fallen prey to the same dynamics.”

And even now our society celebrates financiers. “As a mother, if you say ‘my son went to work for Goldman Sachs’, no one thinks you failed. We glorify jobs that make people unhappy.”

Follow Rosamund Urwin on Twitter: @RosamundUrwin

Swimming with Sharks is published by Faber, £12.99