Personally I blame it all on Tie Rack

That is to say the entire banking crisis, at least the London end of it.

And why is that? Look back forty or even thirty years ago, and the London financial markets were very clearly delineated. On the one hand there were the merchant banks, largely filled with public school and Oxbridge graduates, or perhaps former Guards officers or plain old Etonians without a university education but buckets of "polish" and family contacts, which came in useful when putting a deal together or looking for some assets to manage.

On the other hand, there were the staid commercial banks, largely populated by a less flashy class, but more conservative looking. As one merchant banker put it, "They live off their deposits, while we live off our wits". Things were different in the boardrooms, with banking families, such as the Bevans, Tukes, Peases, Lamberts, Seebohms, Gurneys and Trittons who ran Barclays and were a class apart from the rest of the management and staff.

Stockbroking and other trading firms were run by an alliance of old money and East End traders, Sloane Rangers and barrow boys to use two cliches. The most obvious difference between the two sides of the city, apart from the overbrimming self-confidence and upper-middle class habits and mores of the merchant bankers, was the attire. The merchant bankers wore tailored suits with the distinctive double cuff Bengal stripe shirts that could only be bought from Jermyn Street or one of the pokey little tailors' shops tucked away in some corner of the City. The merchant banker had worn these shirts from an early age, not least because the tailors had branches in Eton High Street. And then there was the crucial silk tie, often a Hermes classic, but also other similarly understated but reassuringly expensive neckwear.

The commercial banker, on the other hand, bought his suits ready made from Burton's, Hepworth's, Dunn's and Austin Reed, with a choice of shirts that were altogether less striking in colour and design, mostly plain whites and plain pale blues, and ties that could have passed as curtain material.

But round about the same time as Big Bang, there was Tie Rack. Suddenly every bank clerk and messenger boy could afford to wrap some silk around their necks, and while the material creased and the day-glo colours could cause retinal damage at twenty metres, the course was set. Soon commercial bankers were sampling the delights of mail order shirts from firms in Northumberland who normally advertised in the back pages of the Telegraph, and it wasn't long before these companies grew into the James Meades, Charles Tyrwhitts and T.M.Lewins of later years. Bankers embraced the Gordon Gekko look, and while the shirts from Pink never had the luxurious feel of a Harvie & Hudson, at a distance, the two were increasingly indistinguishable. Suddenly everyone was an "investment banker" and even the back office might turn up in a $150 French silk tie emblazoned with horseshoes, snaffles and stirrups

So what has that got to do with credit default swaps, securitisation and the credit crunch? Well quite a lot actually. In days BTR (Before Tie Rack), commercial bankers were staid and conservative. Merchant bankers talked flashy talk but didn't have much capital to play with. Then cash rich commercial bankers decided that instead of lending prudently to brokers and traders they could incorporate those businesses into their own. Rather than playing patsy to some merchant banker's fancy ideas, they could run their own merchant banking business or buy into one.

At first the merchant bankers resisted, stressing the value of their independence to their customers, but when they realised that the rest of the world thought they were nothing more than fast talking snake oil salesmen, they changed their perspective and told the world how much extra value they could add if only they were permitted access to a tame bank's capital, which is how such names as S.G.Warburg, Morgan Grenfell, Kleinwort Benson and Cazenove came to be owned by banks.

Meanwhile the clearing banks who hadn't bought much in the way of merchant banks, or where they had (Barclays, Midland), had adsorbed the merchant bank into the rest of the business, started their own "investment banks". After all, they had the same shirts and ties and surely that was the main qualification for being an investment banker. Some of them even wore braces, and the top traders, particularly those who inflated up their measured performance with tax deals, might even have a Saville Row tailor come in to measure them up for a suit in their offices.

The roots of the banking crisis lie in letting the people with the racy ideas control the banks' capital, with the bill for their mistakes passed to the tax payer. It didn't used to be this way, and I think we can put the blame for today's malaise on the purveyors of low-priced silk neckwear from a quarter of a century ago.