During the summer holidays, circumstances compelled me to cut through the City of London with my children. I thought it a good time to give them a little background. "See that man over there?" I said, loudly. "He's a banker. In all these buildings bankers like him lost billions and billions of pounds, but they're OK because they didn't have to pay back the money, and we did. And the amazing thing about it is they're still doing it, they pay themselves unbelievable salaries, and they're not sorry. That's why everyone hates bankers so much."

I wish I had read John Lanchester's book before I started on my impromptu denunciation. (You should try it yourself, next time you have a free weekday lunchtime with the kids and are in the area. It's hugely therapeutic, and the young ones love it.) It would have given added depth and urgency. It's trillions, for a start. And I could have quoted him: "The OECD rates Canada's banks as the safest in the world  the US comes 40th, two places behind Botswana, and the UK comes 44th." On the other hand, I might have skipped the chat and simply strangled my target, pausing only to hope that he was indeed a banker and not an unusually well-dressed courier.

Of all the books I have reviewed in this column this year, this is probably the most indispensable. It will, in the end, make you scared and depressed, but it is a very useful and entertaining read, which will at least arm you internally for the dark times to come.

Entertaining? Economics? Oh yes. For the past couple of years, Lanchester has been writing essays about the subject, and particularly the credit crunch, for the London Review of Books. These have been gratefully seized upon because Lanchester not only knows his subject, but he writes in such a way that he communicates his knowledge so that it sticks. Writing about the Financial Services Authority, the body which did sod-all to regulate the banking industry and thus prevent the crash, he says: "Regulatory bodies should have access to the perspective of outsiders, looking at the industry from its periphery and prepared to ask obvious, which sometimes means obviously unpopular, questions. The FSA wasn't like that." Well, Lanchester has approached the business from an outsider's perspective so that we, also outsiders, can have the whole business of derivatives and so on explained to us in a manner which does not make our heads spin.

Actually, your head will spin: but not from incomprehension. Rather from disbelief that such practices as are endorsed and indeed enthusiastically undertaken by the financial institutions who have bankrupted our governments are allowed to take place at all. These are institutions and people who make Minder's Arthur Daley look like a model of Christian probity and honesty. The mathematical models used to predict economic behaviour were flawed. The regulations, where they even existed, were effectively toothless. The culture is still toxic with greed.

I will not paraphrase Lanchester's explanations here, though, because he does it better, and what you should be doing right now is going online to buy his book or making a note to do so next time you're passing a bookshop. I pray that those in the industry, and politicians, will do so too. We would all benefit from it.

What I will do is speculate on the nature of Lanchester's prose. When I read the articles in the LRB which form the basis for this book, I would curl up with them the way I would curl up with The Hobbit when I was 10 years old. There is something deeply pleasurable about the way Lanchester writes, and it's not just a matter of his wit and the laugh-out-loud imagery, or the miraculous way he makes you understand things about which you had hitherto resigned yourself to perpetual ignorance; it's something he understands at the level of tone and sentence structure. I'm not quite sure how he does it. But he's written a book that not only zips by, it makes you want to reread it. And it's important.