Sarah Sands: For the war poets 'de nos jours', look no further than the City

A topic at literary festivals and book launches is: where are our war poets? Maybe our writers have been captivated by an even larger story. The reason the Ministry of Defence cannot send more helicopters to Afghanistan is that it is flat broke, like every other department.

An investment banker who was at the centre of the maelstrom of the past few years has taken to sending cheery end-of-the-week round robin emails from his beach house. This week's said: "The public sector borrowing requirement has increased fivefold since the Chancellor's prediction, from £40bn to £200bn ... tax revenues have fallen by £32bn. When the consequences of this fiscal profligacy start to bite, there will be civil unrest on a scale hitherto unseen ... The UK is embarked on the Road to Hell."

The consequences of the madness within the banking system are now apparent. The scale of the fallout is beyond the imagination of most of us – and thus a gift to writers. We are in for a gilt-edged season of Citylit.

Lucy Prebble received ecstatic reviews for her play Enron in Chichester last week. It transfers to the Royal Court in September. Perhaps it helps that the 28-year-old Prebble comes from a business background: her father was the chairman of a multinational software business. As she explained to the London Evening Standard: "If you watch a trading floor in action, it's one of the most theatrical places." Rupert Goold, the play's director, has a reputation for high-velocity productions. But he couldn't make them work if the material weren't there.

Next up is the great social dramatist of our age David Hare, who has been spotted across financial institutions this summer researching his play about the crisis. Sebastian Faulks has a banker at the centre of his forthcoming novel. John Lanchester is writing a book about the credit crunch. We have witnessed extraordinary events and now we must understand what they mean. Financial fraud flowers when there is a suspension of disbelief. We have been living among delusion and shadow. We started to believe that foul was fair.

As a subject, the financial crisis is so engulfing that it seems frivolous to turn to others. Last week I went to see Hanif Kureishi's The Black Album at the National Theatre. The play has a large theme – the journey from the publication of The Satanic Verses to British Islamic fundamentalism. But it felt off the pace. The liberal arts establishment cannot go on forever picking over the corpse of Margaret Thatcher. Allusions to her in The Black Album evoked no visible shudder from the audience.

Many writers have avoided the City as a canvas because they do not approve of it and do not understand it. Yet truly the devil has the best lines. What I loved most about the Big Bang, that 1980s explosion of City institutions, was Caryl Churchill's Serious Money, Tom Wolfe's Bonfire of the Vanities, Michael Lewis's Liar's Poker and, of course, Michael Douglas in Wall Street. It may be morally tricky that monsters can also be entertaining, but it is more damaging to ignore that fact.

The Enron scandal happened because nobody was asking questions. Prebble's play depicts "a celebration of ignorance". My investment banker friend sends his gloomy emails because he fears we are still not paying attention. He urges me to repeat the message. I tell him that newspapers are full of reports of public debt.

But both of us know that, even as the country groans in pain, the City is getting up to its old tricks. Prebble's Enron looks like the first great, artistic torch of truth.