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Novel traces one man’s financial legacy
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TEXT OF INTERVIEW
Kai Ryssdal: We’re doing summer reading with a financial twist this year. Today the latest novel from the English writer Iain Pears. “Stone’s Fall” opens in 1950s Paris, moves through time with bank failures and arms deals, running headlong into the ruin of the title’s deceitful main character: John Stone. Iain Pears, good to have you with us.
IAIN PEARS: Hi.
Ryssdal: A lot of what happens in this book, the deceit, and the credit problems, and the high finance, it sounds scarily ripped from today’s headlines, even though it’s set many, many years ago.
PEARS: No, I prefer to think today’s headlines were ripped scarily from my book. I started writing the book about three, four years ago. Because what I like to do when I write these historical novels is write about things which no else is really interested in, and try to make them interesting. So I cast around for something which would be entirely irrelevant to the modern age, and I thought that a banking crisis would be just the thing.
Ryssdal: Had we only known what you know, right?
PEARS: Yes, and had I only known what I know because I could have spent my time shorting banks stocks rather than writing a novel, which would have probably been more lucrative.
Ryssdal: So, after four years of immersing yourself in Victorian high finance and banking, is it your sense that not much has changed in the past 120 years?
PEARS: Well, quite a lot has changed in some ways because the bank that I was writing about, Barings, was a partnership. So the partners were personally liable for the losses. When Barings went down the drain, everything of the family was sold. And so the family actually suffered, which meant that the banking community as a whole was relatively immune, because the bankers who caused this trouble were seen to have suffered as well. People didn’t resent it so much.
Ryssdal: As fits a good Victorian novel, there is lying, and deceit and misleading and all kinds of things in this book, which would seem to run counter to the notion of what it takes to make a banking system succeed, which is trust and confidence, and it seems that happens today as well.
PEARS: Well, in the 19th century, really up to the 1970s, the city of London had this notion that a gentleman’s word is his bond. He could you a word, and that was good enough. And to a certain extent that did apply. If a banker said, you know, I will pay you 100,000 pounds next Tuesday that was considered to be a legal contract. But that aside, I mean the double-dealing and deceit was just as great then as it is now. I think it’s just that the sums are larger now. And also in the book everybody acts in rather dubious ways, but in some ways they’re not, they’re being relatively open about being deceitful, which makes it somehow better, I think.
Ryssdal: It’s still tricky to run a banking system when people are being honest about lying or lying about being honest.
PEARS: Well, as long as everybody knows what the rules are, it works. It’s when people break the rules, which is the trouble.
Ryssdal: What’s the lesson then after 550 pages of this book, and the last three years of the financial crisis in this world?
PEARS: You know, it’s if trouble can happen, it will. And if you get caught in it to a certain extent you can’t say you haven’t been warned. I mean, it’s a fairly obvious lesson. Just that sooner or later this is going to happen again.
Ryssdal: And you can bank on that, I mean you clearly were with this novel.
PEARS: Well, I did a little work on other financial crises as well. And the banking crisis is done up every 30 years. In England at least it’s the banking system takes 10 years to recover, and then it takes 10 years to be respectable, and then it takes another 10 years to get above itself. And then bang it all blows up again.
Ryssdal: Iain Pears. His most recent novel, this one about high finance and misbehavior is called “Stone’s Fall.” Mr. Pears, thanks very much for your time.
PEARS: Thank you.