EACH time I saw a file of armed security guards marching solemnly to and from a bank in escort of a few money containing boxes, I felt I was witnessing a ritual in the misty realm of religion.

Even allowing for the fever of commodity fetishism that infects many of our get-rich-first compatriots, I can think of no other items or persons so dignified.

"Money makes the mares go," so goes a Chinese proverb. So for all the ambivalence we used to feel about money, it is most of the time much more than a necessary evil.

We used to moralize a lot about how money should be made, with cautioning that money earned by the sweat of your brow is more valuable than easy money.

Legend has it that once a parched Confucius came across a spring named daoquan, (thief spring), and the sage refused to drink from it.

But the market credo is dictating a new philosophy based on pragmatics.

When money is the only measure of success, and success becomes the ruling passion of life, how can we pretend not to be envious of bankers, who are in daily communion with money, especially when the money is, at least at the beginning, other people's money?

Robber barons

Today bankers are a far cry from the humble, plodding petty clerks who used to dutifully take care of others' money.

According to official statistics, last year the average annual salary for financial profession in China is 89,743 yuan (US$14,474), the highest of all sectors and 1.92 times the national average.

A former vice president of China's Agricultural Bank has recently been expelled from the Party and his official positions for, yes, taking huge bribes.

It is also rumored that Yang owed Macau casinos 3 billion yuan in gambling debts.

Therefore, in learning from the advanced Western banking practices, in our eagerness to become global financial hubs, it's important for us to understand why some big time bankers are also robber barons who build their wealth from systemic cunning and deception.

"The Bankers' New Clothes: What's Wrong with Banking and What to Do about It" by Anat Admati and Martin Hellwig is among the latest attempts at exploring what has gone wrong with Western banking, and what should be done to avoid a recurrence of the recent crisis.

Recent history suggests that is by no means an easy task.

Banking experts and academics are suggesting that banking is so different from any other trade, and so vital to the national economy, that any tinkering with it must proceed with the greatest caution.

As bankers won the debate on both sides of the Atlantic, banking reforms have, predictably, foundered.

First, bankers lobbied successfully for a generous bailout, and then launched a brilliant crusade defending their former paychecks and bonuses.

As the authors observe, "Important parts of the policy discussion go on behind the doors. Even when regulators ask for public comment on a proposed regulation, most contributions come from the industry and its supporters, and additional lobbying goes on behind the scenes."

Another tactic to defend the bankers' status quo is the impenetrability of the banking jargon that helps confuse policymakers and the public, and muddle the debate.

Bankers' new clothes

Of course, they know they must adapt their strategy to changing circumstances. At the beginning of the crisis, they were lying low, mindful of the anger caused by the mess they created, especially the rage over the use of taxpayers' money for an expensive bailout.

But since then they have become outspoken again, vociferous about the mysterious features of banking, and anyone who dares to question this mystique risks being declared unqualified for the esoteric discussion of banking reform.

The bankers' mystique is, according to authors Admati and Hellwig, just like the emperor's radiant (but invisible) new clothes in Hans Christian Andersen's tale. The mystique shrouding modern banking, like the emperor's new clothes, is fictional.

The purpose of the book is "to demystify banking and explain the issues to widen the circle of participants in the debate."

Why did banks get in so much trouble in the crisis? Why were banks and other financial institutions bailed out? Were the bailouts necessary? Will new regulation help or hurt?

The bank lobby has fought fiercely against any attempt at change.

One argument (or threat) against reform is that tightened regulation would reduce economic growth.

For instance, it is argued that increased capital requirements would compromise banks' ability to extend loans, having a negative impact on the general economy.

Regulations

The book effectively debunks this myth by questioning why banking should be considered different from other industries, many of them productive.

An additional argument that could be cited against the banking mystique is the hype about growth.

In a world of drastically widening wealth gaps, is the pursuit of growth as important as the effort of making a more equitable society where people can live in contentment, free from pollution, and exploitation, notably from bankers?

Why are bankers making huge money while the average depositor is losing money?

So meaningful discussion can be conducted even outside the context of banking.

"A country's public policy should not be concerned about the success of its banks or other firms as such, because success that is achieved by taxpayer subsidies or by exposing the public to excessive risks - for example, the risks of pollution or of a financial crisis - is not beneficial to the economy and to society," the authors observe.

Only when banks are perceived no differently than any other institutions can we successfully debunk the "too big to fail" myth, by first creating mechanisms that would allow large banks to fail without disrupting the whole economy, or at the expense of public support.

Stricter capital requirements would serve in that direction.

As the authors claim, the current argument of the banking lobby can be similar to subsidizing the chemical industry to intentionally pollute rivers and lakes. "Such subsidies would encourage additional pollution. If the industry were asked to limit the pollution, it would complain that its costs would increase."

In simple and accessible terms, the authors show convincingly that banks are as fragile and destructive as they are, not because they must be, but because they want to be - and they get away with it.