How Citigroup Escaped Financial Disaster in 2008
Two Centuries of Booms, Busts, in addition to Bailouts at Citi
By James Freeman in addition to Vern McKinley
365 pp. Harper Business. $35.
I was very much looking forward to reading “Borrowed Time,” James Freeman in addition to Vern McKinley’s book about “two centuries of booms, busts, in addition to bailouts” at Citigroup, once the nation’s largest bank. (in which will be at This kind of point fourth largest, by assets.) I was hoping the authors could deliver a much-needed, in addition to definitive, explanation about how in addition to why a decade ago the federal government decided to rescue Citigroup instead of letting in which go down the tubes, where in which probably belonged given how unhinged the bank’s risk-taking had become. After all, there have been many books about the 2008 financial crisis in addition to how various Wall Street banks did, or did not, survive in which. yet there has never been an accounting of how Citigroup got itself into so much trouble in addition to why the decisions were made to bail in which out — to the tune of, as the authors reveal, more than $517 billion all told, some $40 billion more than the roughly $476 billion in cash in addition to guarantees described in a 2011 congressional report.
in which there hasn’t yet been a treatment of the Citigroup debacle will be a noteworthy omission inside canon, considering how what happened at Citigroup bucks the conventional wisdom about the financial crisis: to wit, in which in which was fomented in addition to exacerbated by the so-called investment banks — like Bear Stearns, Lehman Brothers in addition to Merrill Lynch — in addition to in which the so-called commercial banks — like JPMorganChase in addition to Bank of America — came to their financial rescue. (Except, of course, for Lehman Brothers, which was not rescued in addition to then failed in spectacular fashion.) Recognizing in which different types of institutions ended up with different outcomes contrasts with the views of political progressives like Senators Elizabeth Warren in addition to Sherrod Brown in which none of This kind of could have happened if only the Glass-Steagall Act, the Depression-era law separating commercial banking through investment banking, had never been repealed in 1999. The repeal allowed for the blockbuster merger of Citibank in addition to Travelers, which owned Salomon Brothers in addition to Smith Barney, two investment banks, in addition to created Citigroup inside first place. yet those, like me, who have argued in which repealing Glass-Steagall did not cause the 2008 financial crisis have always stubbed their toe on Citigroup because in which wreaked so much havoc before its enormous bailout.
The authors certainly could appear to develop the credentials for a revelatory work of narrative nonfiction. Freeman, a longtime columnist at The Wall Street Journal, will be also an assistant editor on the paper’s editorial page. He was once an “investor advocate” at the Securities in addition to Exchange Commission. His collaborator, McKinley, a visiting scholar at George Washington University Law School, will be a self-proclaimed specialist in “diagnosing financial instability” inside banking system in addition to a former employee of the Federal Reserve Board of Governors. They also had a compelling thesis through which to explore why the feds bailed out Citigroup in 2008: in which throughout the bank’s 206-year history in which has often teetered on the edge of financial ruin, only to be rescued repeatedly by friends in high places.