Ahead of the annual IMF/World Bank meetings in Washington, the world is again in a febrile state. There is not, it must be said, the sense of calamity that attended the same gatherings two years ago, in the immediate aftermath of the collapse of Lehman Brothers. But uncertainty hangs in the air, made worse by the doubts over the sustainability of the US recovery following a collapse in poll ratings for President Barack Obama and a stream of announcements of the departure of erstwhile trusted aides. The four main economies – the US, China, Japan and Germany – continue to be pummelled by political controversies with considerable repercussions in the financial and monetary sphere. Whether it is the row between China and Japan over a detained Chinese trawler captain, the Sino-American spat over trade and the renminbi or Germany’s controversies with its neighbours over the long-term future of euro governance, politics spills over into economics. The same is true, but with opposite direction of causality, in the world of investment banking: economics spills over into politics.