These diaries are written by people who work in finance and who have had a front row seat as their industry goes through the biggest changes in decades.
They give us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.
Anthony (not his real name) works for an investment bank in the City
George Soros, the man who broke the Bank of England; the hedge fund billionaire who never gets the market wrong, announced this week that the recession was coming to an end. Even the OECD thinks that things in Britain are picking up and the market generally has had a great run into positive territory. Many punters are calling the end of the bear market. I am not so sure. I sincerely hope I am wrong but to me this feels like a "Dead cat bounce".
George Soros said the recession was ending
I can hear you say: "What does he know?" And I would not blame you for not believing me. After all, I am one of those nasty bankers who got everything terribly wrong. But hear me out and in the end draw your own conclusion. The fact is experts get things wrong, and the truth is few people predicted the severity of this downturn. Not even Vince Cable thought it would be this bad.
In fact nobody knows. Not governments, not bankers, not journalists and certainly not Joe Public. I was re-reading Alan Greenspan's biography "The Age of Turbulence" this week and was struck by how little he knew and yet before he retired he was feted as a truly great head of the US Federal Reserve, whose economic management guided this huge period of prosperity for the world economy.
Did Alan Greenspan see the economic downturn coming?
He wrote "if the story of the past quarter of a century has a one line plot summary, it is the rediscovery of the power of market capitalism". He attributed this to benefits of global deregulation of financial markets. Now governments want the exact opposite.
We are all to blame
So let's call a truce to the blame game. We are all to blame. Governments for encouraging deregulation, banks for lending irresponsibly and Joe Public for maxing out on his credit card or financing exotic holidays on the paper profits of house price rises.
We will get out of this but I remain downbeat about our prospects in the near term.
In a previous diary
I cast doubt on Alistair Darling's forecast and now the Bank of England is agreeing with me. Its concern has caused it to increase quantitative easing by a further £50 billion. What this means is the money supply is growing and that can only mean inflation and eventually higher interest rates. Financial advisors are telling us all to lock into fixed rate mortgage deals now because rates are going to go up.
My concern is that this is a false dawn and this rally has been caused by the enormous fiscal stimulus boosting the economy. But it cannot go on forever. Governments have reduced the likelihood of a depression and that should be applauded but now we have to pay and that may lead to the so-called "double dip" recession.
I think the financial impact of unemployment has not worked its way into the economy yet and when it does house prices will resume their downward path. Affordability remains an issue for a young first time buyer with average house prices still around five times average earnings.
Working in the banking industry, my pessimism is probably not unusual. Although banking stocks have rallied, the future still looks bleak. My bank experienced more redundancies recently which has not lightened the mood.
Banks are still exposed
Banks are also still heavily exposed to unsecured credit card lending and their earnings are restricted by this and increased capital requirements that I discussed
in my last diary.
Payments to governments for the bailout of the banks will also suppress bank earnings for many years to come. The desire to be more risk sensitive will also restrict the opportunities for profitable banking in the future.
So what! I hear you cry. Why should bankers make huge profits? And you may be surprised to hear that I agree with you.
Just like you, I am fed up with bankers. The industry does not have that sense of excitement any more. I remember the last recession and it did not feel like this one. This feels different. All the hard work put in over many years seems to have all come to nothing.
Like so many others in the industry there is a sense that the career might have been put to better use doing something truly productive like teaching or manufacturing. So if you are an undergraduate reading this and thinking that you would like to have a career in the City, I advise you to think again, the days of the Masters of the Universe are over.
Laura (not her real name) works for a commercial bank in London.
As if by magic, another topic has come along to keep banking and the economy out the headlines for another week - Peter & Jordan's split. The feeling in the office is that although people are still angry about Fred Goodwin and City fat cats, they have come to realise that having no bankers would be a lot worse than having no MPs (you didn't really expect me not to mention expenses?)
Peter and Katie's split was something different to worry about
The last 12 months have been akin to a child learning that the tooth fairy, Santa and Care Bears aren't real one after another. Who would have thought that many high street banks were effectively betting our money on things which were nothing more than pillars of sand? Or that some MPs didn't have the gumption to ask for a decent salary and decided to push the boundaries of what allowances they could claim instead?
It wasn't the £21 billion RBS/Natwest loss that got Fred into trouble, but the relatively trivial amount of a £17million pension pot that truly got the populace in a lather. In the same way, it isn't the squandering of our future financial health by the Government debt, but the relatively trivial £24,000 a year second home allowances that finally made us turn on the Government. Some may argue therefore that it is 'irrelevant' to note that all second home claims together don't even add up to the pension pot.
With everything stacked against the banking system at the moment in terms of clients going bust, the tail end of the LIBOR/Base rate nightmare and a recession, there are still some people doing well and doing more than they have been asked to do. These are not colleagues who are out betting your granny on a mortgage to a one legged stilt walker, these are people who are searching out good lending propositions in this country despite of the current situation. They will not be getting bonuses this year despite helping to prop up their businesses. It is perfectly possible that the financial results of companies that employ thousands will be in a large part down to a few hundred people.
You get what you pay for
I'm sorry to mention bonuses again but this is the one issue that has not been properly resolved, and I think that it is quite fitting with the current furore over the pay of our elected representatives. Are people honestly saying that we shouldn't pay for a job well done anymore? A good old British saying is that "you get what you pay for". If you don't motivate or reward the good staff in our banks will they sink back down to the average because they feel dejected? If you don't pay our politicians the same as say a BBC newsreader, a GP or even a mildly senior civil servant you can't really expect our best people to be sadistic or altruistic enough to stand.