Financial Crisis Management 101: The Deep Bow (tears optional)

It is no bloody fun, let me tell you, being sneered-at by a South Korean bureaucrat. Even when they're paying for lunch at Nobu.

But that, it seems, is the price you pay nowadays for being both British and a financial journalist: all sorts of people around the world, especially emerging market economies in Asia, are beginning to wonder why the hell they ever gave a hoot about what we thought. The following is a slightly compressed version of a lunchtime rant from a very senior Finance Ministry suit who had flown in from Seoul for a couple of days. It very nearly ruined the soft-shell crab spring rolls.

"We took advice from Wall Street and the City; we did one thing one year and a different thing 10 years later because Anglo-Saxon capitalists changed their mind about the correct medicine; we even visited your Financial Services Authority in London because it was supposed to be the perfect model of how a regulator should be structured. Well, it was all wrong. Just look at the British banks."

Ah.

And meanwhile, in Japan and elsewhere, there is quite serious talk about the creation of a new Asian version of capitalism. Call it "tenderhearted", "humanistic" or whatever - the principal reason it is being given its moment in the sun is because the theories, dogmata and free market humbuggery that has been pouring in from the West has been so catastrophically discredited.

The most troubling thing is how easily one could get carried away by this self-loathing and forget some of the more stinking inadequacies of Asia's version of capitalism. It is all very well to talk about right-thinking Asian managements paying exactly equal attention to customers, shareholders and employees, but none of them actually do. Asia's "humanistic" capitalism argument is, in reality, an empty vessel: Japan Inc unevenly scatters price sensitive information around the market like Jelly Tots at a children's party and thinks of foreign money as an enemy to be defeated. Korea Inc's corporate governance issues remain breathtakingly awful, risk management by the banks is dire and those gargantuan slush funds have not gone away. China Inc's cheerleaders can say all they like about the relaxation of state control: the state still technically owns all the land.

But Japan, at least, does have something to offer the global financial crisis. The deep bow of apology.

Thinking about it now, Japan's banking crisis of 2002-3, the fallout from the Asia financial crisis of 1997, the 1993-4 recession, the "lost decade" - they were all dress rehearsals for today's cataclysm. I happen to be among the crowd which believes the experience in Japan has a very great deal to teach the world about crisis management, deflation, prolonged recession, stimulus and pain. I know there are plenty who dismiss this, but they are the same ones who reviled the Bank of Japan for its lack of orthodoxy though suddenly zero interest rates are all the rage.

During Japan's own ghastly banking crisis and corporate collapse phase, it received all manner of advice about what it was doing wrong, how it should be doing things better etc. All the time, though, it owned precisely the solution that the City and Wall Street now find so impossibly difficult to apply. The chief executive of the failed bank/scandal-hit company/bankrupt manufacturer would call a press conference. He and the board would stand up, put their arms by their sides and bow deeply in apology. The press flashguns would bathe the room in white light, the mighty corporate chieftains would hold the abject pose for about 30 seconds and the job was done. If you were lucky, and the screw-up was especially egregious, you might even get a tear.

Practically useful? Hmmm. Heartfelt? Almost certainly not. Constructive? Absolutely.

Mock the triumph of form over substance if you like, but those deep bows - and I have seen many, many of them in my time - were an extraordinarily powerful medicine. Of course they didn't help the shareholders who had lost a bundle or the workers who were about to be sacked, but they performed a vital function that Japan and the world desperately needed to see. The bowing made toddlers out of titans. It turned crisis into drama and then brought a curtain down on the show. It moved the world on from recrimination to remedy. It underlined the fact that lurking beneath every calamity are hard truths that cannot be explained away with grand economic theories : people are greedy, stupid or scared and a good 45-degree bow (perhaps with a deprecating glint of balding head) acknowledges that in spades.

The power of the bow, by the way, is infinitely greater than that of the perp walk. Wall Street may feel it is getting closure as a humbled, stubbly CEO scrambles from car to courthouse; the press may enjoy the contrast between his previous life of luxury and excess and the impending stint in the clink. But these are pale emotional substitutes for what we really want to see - a physical expression of remorse. And we know westerners can do it, by the way. Back in 2004, Citigroup's Chuck Prince had to bow to a Japanese audience because the local arm of his bank had been done for lax money laundering controls.

Instinctively these are the three things we want the bosses of RBS, Lehman, Northern Rock, General Motors and all the others to do as the crisis deepens: accept that the Japanese have done financial crises before, acknowledge that the Japanese are right about one thing, straighten the back and get those hips moving.