By comparison, the contribution from financial services in the United States to the American economy never exceeded 8 percent.
In a bid to capture more revenue, the British government has decided to raise tax rates on the affluent, many of them working in finance. But the new top income tax rate of 50 percent for those earning at least £150,000 ($219,000) may only make things worse, said Mr. Snook, the economist.
“These people are highly mobile and they will leave London,” he said. “The impact on public finances will be negative.” Britain’s top tax rate will soon rank fourth behind those of Denmark, Sweden and the Netherlands — not quite the advertisement one would expect from one of the world’s leading financial centers.
In many ways, Mr. Ishikawa’s career tracked the credit explosion that has now imploded. When he began work as a lowly credit analyst in 2002, banks in London issued about £20 billion in securities linked to various mortgage instruments. His career took off as that figure surged to over £180 billion over the next five or six years.
Mr. Ishikawa received a $3 million bonus from Morgan Stanley in 2008 as a reward for peddling assets that turned out to be toxic.
With that line of business virtually defunct, banks in the coming years must return to lower-risk and lower-return businesses like equity and bond underwriting, foreign exchange trading and traditional deal-making — businesses that may well be profitable, but can in no way make up for the loss of such a lush specialty.
The Center for Economic and Business Research estimates that corporate and income taxes from the financial industry will shrink from 12 percent of the overall tax take in 2007 to 8 percent this year and perhaps lower in the years ahead, a prospect that could force Britain to increase its already substantial borrowing requirement.
The crisis has humbled all financial centers, from Wall Street to Dubai. According to an index produced in Britain that ranks financial centers around the world, the City of London still comes out on top, closely followed by New York.
The gap, though, between these two and Singapore, which is now third, is narrowing.
Lord Adair Turner, the chairman of the Financial Services Authority, agrees that London as a financial center will be in for an adjustment and says that a large portion of the banking industry’s profit contribution to the economy was “illusory.” But even in a more restrictive environment, he points out, London’s importance as a global financial hub and the most valuable trading center in Europe will not go away.
“The City is important today for the same reason it was important in 1890,” he said.
As for Mr. Ishikawa, who is 30 and grew up in Britain as the son of a successful Japanese executive, he is putting his hopes into a new career as a writer. His book, “How I Caused the Credit Crunch,” chronicles the debauched excesses of the boom — he was briefly married to a Brazilian lap dancer — by lightly fictionalizing his six-year stint in finance.
“I really don’t miss it,” he said, sipping a coffee near the building where he was laid off. “There are many more kids out there more hungry than me.” Like Faruq Rana, for example.
Mr. Rana, the 26-year-old son of Bangladeshi immigrants, was born and reared in Tower Hamlets, a district abutting Canary Wharf that has Britain’s highest unemployment rate.
From his window, he can see the towers of Citigroup and Barclays reaching into the sky and his ambition to one day work as a trader in one of those buildings soars nearly as high. “Every day when I wake up and open up my window, I can smell my job,” said Mr. Rana, who is a student in a government-financed program at Tower Hamlets College that prepares local youths for jobs in the financial industry.
Unlike Mr. Ishikawa, Mr. Rana did not go to Eton or Oxford, but he remains undeterred. “I have the motivation and the drive,” he said. “I think I can be one of them.”