It’s politicians who hold the whip over bankers

The Brexit negotiations have shown how governments not financiers set the rules

It’s 10 years since financial markets brought the global economy crashing down to earth. A decade on, with Brexit ahead of us, we’re still engaged in a fascinating dance between politics and finance. Which has the upper hand? Knowing how much money our failing banks extracted from the state, it might seem like markets always wield the whip.

But when financiers dabble in politics, it is usually governments that come out on top. Look at history’s most famous lender, the Medici Bank. By the 1470s, the Medicis had built the world’s first multinational financial empire, spanning the European continent. To keep accounts balanced between its branches, however, the bank relied heavily on its own extensive trading network.

It shipped silk northwards and wool southwards. Caravans of gold were hauled back and forth to keep each branch solvent. Dealing with bandits was bad enough, but the worst bandits of all were those who lived in palaces. In order to keep trading, the bank required export licences, and that required the blessing of monarchs.

By the mid 15th century, King Edward IV of England had become a major customer. The only way to stay in a king’s favour, however, was to extend him copious loans to fund military ventures. The trouble with kings is that when civil war or military defeat strikes, they can simply change the terms of their own loans. Edward suffered both, first the War of the Roses, which he won, and then an invasion of France, which he didn’t.

The Medici Bank, as his creditor, was also on the losing side. In 1472, tangled up in ill-advised political lending, its London branch was forced to close. By the end of the century, the whole bank had gone under. Unlike RBS, it managed not to take anyone else with it.

The crises of 2008 and the euro made it seem as if banks rule the world. In reality, they are at the mercy of politics. What politicians see in crises is not bankers pulling the strings, but barefaced panic.

With Brexit negotiations about to start in earnest, financial institutions are begging governments not to overlook their interests. Britain is scrambling to keep them here. Governments in the eurozone are falling over themselves to lure the banks there.

Ten years after the crisis, it might seem as if markets are still dictating politics. But in the next two years, it will be the bankers who are waiting on tenterhooks to discover the outcome of late-night Brexit summits. Politicians may imagine they are slaves to finance. In reality, it’s they who hold the real power.

Channel 4 may have taken it to a new low with its Diana documentary, but England’s prurient interest in royal sex lives is nothing new. Those in doubt should take themselves off to the Theatre Royal Haymarket to see Queen Anne, a brilliant drama about the court intrigues and political rivalries surrounding one of the country’s most overlooked monarchs.

As well as documenting her personal trials, it portrays the start of a golden age for English satire. The play opens with a scene at an unspecified Inn of Court where a cabal of witty lawyers (who else?) are performing a cruel song about Anne’s inability to bear children despite her strenuous efforts in the bedroom. Later on, like our modern royals, the queen is faced with the possibility of her private correspondence being published.

In the same period, writers in continental Europe were still contending with absolute monarchies and authoritarian censorship regimes. England’s rambunctious, lurid, cruel war of words was inhumane to its rulers. But its increasing boldness was also the necessary backdrop for the emergence of parliamentary democracy, and its tribes of Whigs and Tories. Being mocked was the price that English rulers paid for power.

It’s only a shame that Channel 4 has chosen such a soft target. Diana, Princess of Wales, divorced and then deceased, is no wielder of power. She is the late mother of two sons.

Children ought to be spending time online, according to Robert Hannigan, the former head of GCHQ. More to the point, there’s no stopping them. Since we must accept this situation, we may as well work out how to manage it. I downloaded a new program called Freedom, which allows users to block certain websites or cut off internet access entirely for specified periods. It can be scheduled in advance, to avoid temptation, and even has a “lock” mode, which means it cannot be disabled until the scheduled time is up.

As a behavioural tool, it works rather like pension auto-enrolment. I know there may be a way to disable the thing, if I could be bothered, but just having it there stops me misbehaving, most of the time. If children must spend hours staring at screens, then we ought to develop better ways of managing their time online. And once we’ve worked out how to stop them wasting so much time on Facebook, we can start on improving ourselves. FOLLOW Juliet Samuel on Twitter @Citysamuel; READ MORE at telegraph.co.uk/opinion