Stephen Green arrives three minutes early for lunch but apologises for being late. Tall, soft-spoken, and wearing a dark suit, the 60-year-old executive chairman of HSBC is courteous, almost to a fault. We are at a small table in Le Pont de la Tour, a Thameside restaurant favoured by City bankers during the Blair-Brown boom. (Green originally favoured another City restaurant, the Bleeding Heart, but feared the name was an invitation to poke fun at him). There are lunch guests on the terrace outside but inside the place is empty, testimony to the Blair-Brown bust.

The timing of our gastronomic encounter in the shadow of the Tower of London could not have been better. Hours earlier, Sir Fred Goodwin, disgraced former boss of the now state-controlled Royal Bank of Scotland, had bowed to popular demand and surrendered a third of his £16.6m pension pot. As a conversation opener, the capitulation of Sir Fred is irresistible.

“I am not going to talk about individuals,” says Green, firmly. I push back, gently. The smile turns into a squirm. “No, no, no. That’s not fair ... No ... Not even off the record.”

Green’s reluctance to pronounce judgment is curious on two counts. First, he is an Anglican priest who has thought long and hard about right and wrong. Second, he has written two books about ethics and business in the age of globalisation, and it’s the publication of the second, Good Value, that, I remind him, is the reason we are having lunch in the first place.

Happily, a waiter arrives before our verbal skirmish goes any further. We study the menus. Green orders soused mackerel as a starter, followed by roast cod. I go for gazpacho and then roast chicken. In search of common ground, I suggest a shared side order of spinach. Then I return to the ticklish question of bankers being rewarded for failure.

The previous evening, Mervyn King, governor of the Bank of England, had delivered a stern speech at the Mansion House, admonishing bankers for failing to absorb the lessons from the global financial crisis. The Bank of England, he suggested, was like a church where the congregation turned up for weddings and funerals but paid no attention to sermons. “Yes, I was there,” says Green, as he glides into a two-minute discourse on the governor’s plans for tackling systemic risk to the banking sector. It’s fascinating but not exactly relevant. What does Green say about bankers receiving handsome pay-offs when they have driven their institutions into the ground?

Green, sipping a Virgin Mary, counters with studied even-handedness. One must distinguish between bonuses and pension rights. Then again, there have been “market distortions” regarding pay, not just in the financial sector. The era of “my word is my bond” is over but people should not be starry-eyed about the age of the gentleman banker when insider trading was rife. Most important, “rules are never sufficient to enforce morality”, a theme we will return to during our 90-minute lunch.

I press him on the principle of restitution. Green refers me to the Biblical tale of Zacchaeus, a corrupt tax superintendent who gives his ill-gotten gains to the poor. Once again this amounts to an artful dodge: Sir Fred may have been incompetent but nobody is suggesting he was corrupt. More fencing follows. Green simply will not be drawn into personal criticism. It is time to switch subject.

Green was ordained in 1988 and is a non-stipendiary minister attached to a church in London. He has stuffed Good Value with biblical references but also many literary ones, especially from Goethe’s Faust. He studied German at Oxford University – as did I, a few years after him. Green later switched to Politics, Philosophy and Economics, on the grounds that PPE was of more practical use than medieval High German. Nostalgia overcomes me and I challenge him to recite the opening verse in part one of Faust .

“Habe nun, ach! Philosophie, Juristerei und Medizin ... Durchaus studiert” (I’ve studied now philosophy, jurisprudence, medicine through and through), says Green, deploying a more than passable accent. I join in, but he trumps me by invoking Faust’s thumping declaration: “Im Anfang war die Tat!” (In the beginning was the deed). The bookish banker is in full flow, eyes alight, long arms ranging across the table. Passion for German culture is a rarity in contemporary Britain.

I am mindful we still have to discuss the grand theme in his book – the ethics of globalisation, personal responsibility and social progress – but first I ask about his circuitous route to the top of HSBC, formerly Hongkong and Shanghai Banking Corporation, and now one of the world’s biggest financial institutions.

After university Green worked in a centre for recovering alcoholics (“a vicar came to Oxford and inspired me”) before starting his career as a civil servant at what was then the Overseas Development Administration.

“The furthest I got was Paris,” he recalls. Frustrated, he won a Harkness fellowship to the US, completing a master’s degree at the Massachusetts Institute of Technology. In 1977 he joined McKinsey, the management consultancy and stayed until 1982, when, at 34, he was headhunted to join HSBC in Hong Kong. He has been with the bank ever since.

Our waiter arrives with gazpacho and mackerel, along with the bread basket. Munching a roll, I ask Green what were the highlights of his time in Hong Kong. It was, he says, setting up new business systems, then frets that he sounds like an “anorak”.

Green, with his wife Janian and two daughters, returned to Britain in 1992 when HSBC bought Midland Bank. He published his first book in 1996, which sought to reconcile serving God with serving Mammon. This is a genuine dilemma for Green, made more acute by the global financial crisis.

Good Value wrestles with the demands of individual responsibility and the market but it is set in a broader economic and historical context. Green’s ambition is to make the case for globalisation as an inevitable, progressive force and as a human phenomenon.

“Let’s look at the positives: human cross-cultural fertilisation and enrichment; the delivery of economic development around the world; higher productivity ... and in recent times globalisation has lifted hundreds of millions of people out of poverty, particularly in China and India. These [benefits] are material, spiritual and cultural.”

And the negatives? “There is something about the market system which is inherently unstable,” says Green, referring to financial bubbles from tulip mania in the 17th century to the 21st-century crash originating in the subprime lending market. “This is a tiger we are seeking to ride by its tail.” Other negatives, says Green, include social marginalisation and climate change. Green is in full flow so I pass on reminding him of HSBC’s disastrous foray into the subprime arena with the 2002 purchase of Household Bank in the US.

By now, he has polished off the cod, and my chicken is surprisingly succulent. It is time to press Green on his sunny view of social progress, especially in Britain, which he argues is less racist, less class-ridden and less sexist than a generation ago. “Well, I don’t know whether you can measure it ... and it’s not like these things have disappeared. But about 80 per cent of this country considers itself middle class. I doubt that was true then.”

Green’s preoccupation with ethical responsibility and social progress has deep roots, no deeper than his admiration for a relatively obscure Jesuit priest, paleontologist and philosopher, Pierre Teilhard de Chardin, whose masterwork The Phenomenon of Man was first published posthumously in 1955.

De Chardin might be characterised as a sort of Thomas Friedman for the religiously-inclined. Whereas The New York Times columnist is the bestselling author of globalisation primer The World is Flat, the Frenchman saw the world as a sphere, both literally and metaphorically. In his book, Green quotes de Chardin’s view that the evolutionary ascent of human beings occurs in two stages. First, humanity expands around the globe, both in quantity and spiritual development. Second, in the 20th century, as the planet is increasingly populated, a collective memory is formed. Thus globalisation is about something far deeper than economics, commerce and politics. Green tells me: “It is about the evolution of the human spirit.”

Green speaks in a calm, unruffled cadence but also with inner conviction. Disarmingly honest about personal matters, he confesses, for example, that he wrote his book with the assistance of the former FT journalist Richard Addis (once a novice Anglican monk). The two exchanged numerous drafts, often at weekends.

Even more striking is how he deals with his book’s second grand theme: the “pervasive moral ambiguity” that he detects inside human beings and the outside world. At the end of the book, for example, there is a passage of poignant self-examination in which Green describes visiting Weimar, the home of Goethe at the time he wrote Faust, and which is close to Buchenwald, the notorious Nazi concentration camp.

“We tell ourselves we cannot imagine working with human skin as if it were leather. But perhaps I can see myself getting caught up in such an ordinary procedure as this,” he writes, “I can see myself losing sight of ulterior objectives, motives, values – becoming so engrossed in a debate about whether regulation a or b applies in situation x, that I no longer notice what x actually stands for.”

Green’s admission is superficially shocking but, as he argues in his book, can an individual ever know for certain whether he or she would have the moral courage to stand up to tyranny and totalitarianism?

Bringing the conversation back to the present, I say that the parallels with contemporary capitalism are obvious. Too many bankers followed the letter but not the spirit of the law. I wonder, therefore, whether it is fair to draw a distinction – as many Europeans do – between Anglo-Saxon capitalism, which elevates individual self-interest, and Calvinist capitalism, which emphasises the collective good?

“I am a European,” says Green, with passion, “And so are you.” He sees the British as European, and as a committed pro-European he believes there should not be a distinction. I stand reprimanded. But I still want to explore whether Green believes in the innate superiority of different capitalist models, particularly the Anglo-Saxon emphasis on shareholder value. He says: “Shareholder value cannot and should not be elevated to the exclusion of all else. It is a by-product of providing goods and services. When the by-product becomes the end, then we distort the whole market. The market is necessary but not sufficient. So ‘No’ to market fundamentalism.”

It is a nuanced view of shareholder value but he makes his point emphatically – and as he does so, with a sweep of those arms, Green knocks over a glass, sending a flood of water over my notebook. He is mortified: “I suppose that’s going to be published,” he says, half-pleadingly. “You bet,” I respond, mopping up a sea of watery blue ink with a crisp white napkin.

Our waiter arrives with napkin reinforcements. We skip dessert and opt for herbal tea. I ask Green what he is reading at the moment. It’s Der Turm (The Tower), Uwe Tellkamp’s prize-winning 2008 novel set in the twilight years of former communist east Germany. He is ecstatic about this epic, nearly 1,000-page, book.

And this brings him back once again to the “heights and depths” of German history and culture – and reveals a surprising ambition. Green’s dream is to write a history that captures the linear development of German culture and history: from Henry IV’s walk from Speyer to Canossa, where the German Holy Roman Emperor sought to reverse his excommunication; through to Martin Luther, the thirty years war, the unification of Germany, Nazism, and finally a reunited Germany regaining its moorings in a united Europe.

There is enough material here for another lunch, let alone another book. We must leave, although the herbal tea has still not arrived. As we walk out, I am left with a thought: as God’s banker, Green may have a bleeding heart but he really does possess iron in the soul.

‘Good Value: Reflections on Money, Morality and an Uncertain World’ is published by Penguin on July 2, £25

Lionel Barber is editor of the Financial Times

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Le Pont de la Tour
36d Shad Thames, London SE1

Gazpacho Andaluz £8.50
Soused dayboat mackerel £8.50
Roast cod with crushed potato £16.00
Roasted supreme of chicken £16.00
Spinach £3.75
Bottle of still water £3.95
Virgin Mary £4.00
Le Pont Smoothie (Iced Tea) £7.00

Total (including service) £76.16

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Why Midland Bank needed HSBC

Grumpy Old Bankers: Wisdom from Crises Past is a new collection of essays by veterans who have lived through many financial downturns. In this extract, Sir Brian Pearse, who was parachuted in from Barclays to become chief executive of Midland Bank in 1991, writes:

“Sadly, the experience of failure is not easily embedded into corporate memory. In the 1980s, for instance, Midland invested in Crocker National, a mid-sized California bank with a strong reputation for customer service – and, at the time, at least from the viewpoint of a competitor, it looked to be a masterstroke.

“So much so, in fact, that Barclays was keen to make a similar acquisition in order to consolidate all its US businesses into a single sound institution. Crocker was, at the time of its acquisition by Midland, sound – but far too much leeway was given to the American management, and the end result was a loss estimated to be in the region of £3.6bn.

“As a result, there was concern that Midland might not survive, but fortunately Hongkong and Shanghai [now HSBC] took a 14.9 per cent stake and announced it would make a full bid in due course. This gave considerable comfort to the City.

“When, in November 1990, Hongkong and Shanghai pulled out, alarm bells really did start to ring in the City. [HSBC went on to buy Midland in 1992.]. I well remember that in Barclays we reviewed our daylight exposure to Midland – and were greatly concerned to find that at certain times of the day, it could be billions of pounds.

“Not surprisingly, we took action to reduce our exposure. But the question still has to be asked: how many times since that catastrophic series of events have British companies invested huge sums in America without introducing rigorous control mechanisms, leaving existing managements in almost sole control?”

‘Grumpy Old Bankers’ is published by the Centre for the Study of Financial Innovation, £19.95. To order, visit www.csfi.org.uk