Iran is an example of the social change that comes through replacement fertility. In 1984, fertility rates were 7, but by 2006 they fell to 1.9 (and just 1.5 in Tehran). That is a huge amount of change in just 22 years. The riots in Iran this year showed the social change that comes lower fertility rates. According to The Economist, about 1/3 of the population is 15-29 years old – they are better educated than previous generations (something that happens with falling fertility rates) and therefore had different expectations than previous generations with regard to elections. The result – a major clash against traditionalists.

What is the impact on banking? Fewer potential customers than if fertility were above replacement level. But that’s not a bad thing. A “bulge” of working adults (which The Economist refers to as a “Goldilocks” generation) fuels economic growth. In 2008, for example, household savings in China reached almost 25% of GDP. It also enables more rapid accumulation of capital per head.

Where should banks look for the Goldilocks generation? In places many banks in established markets have recently exited: Asia, Latin America.

The implications for the environment, unfortunately, are bleaker (because richer countries pollute more). But I’m a banking analyst, so that’s a discussion to have over a pint sometime rather than here.