HISTORY: “Lords of Finance: The Bankers Who Broke the World,” by Liaquat Ahamed
Long before the banking system buckled in 2008, Mr. Ahamed, a 57-year-old economist born in Kenya, was already examining the 1930s to see what lessons could be gleaned for our own era. His book, begun in 2004 and the first he has written, is, the award citation says, “a compelling account” of how four powerful central bankers “played crucial roles in triggering the Great Depression” with mistaken policies.
‘Lords of Finance’: Sunday Book Review | Books of The Times Review | Excerpt
Finalists: “Fordlandia: The Rise and Fall of Henry Ford’s Forgotten Jungle City,” by Greg Grandin; “Empire of Liberty: A History of the Early Republic, 1789-1815,” by Gordon S. Wood.
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Liaquat Ahamed draws on his best-selling book, Lords of Finance: The Bankers Who Broke the World, for insights from the Great Depression on the recent global economic downturn.…
Earlier related at Ismailimail
Liaquat Ahamed is the author of Lords of Finance: The Bankers Who Broke the World, a book about the causes of the Great Depression which was published by Penguin Press in January 2009. After working as an economist at the World Bank, he spent twenty-five years as a professional investment manager in London and New York.
When the history of the current financial crisis comes to be written, the battle of the index entries will surely be won by central bankers not politicians. The name Bernanke will appear on many more pages than Bush, King more often than Brown, and Trichet will trump even Sarkozy. Most of the time, central banks strive to be dull places; the people who run them relish their obscurity. But when crisis strikes, the limelight shines.
The last great liquidity crisis to hit the global financial system happened 94 years ago, at the end of July 1914. It paralysed the wholesale money market, closed the world’s stock markets for months and necessitated unprecedented government intervention in the banking system. Rightly, this is where Liaquat Ahamed begins.
FT.com – Earlier related.
Liaquat Ahamed earned degrees in economics from Cambridge University and Harvard; he worked for a time at the World Bank and then, for twenty-five years, in the investment-management business. He is the author of a forthcoming book about how the mistakes of central bankers caused the Great Depression. The book is titled “Lords of Finance: The Bankers Who Broke the World,” and it will be published by Penguin Press in January. When I first got to know Liaquat, about a year ago, I thought his book project sounded interesting, if specialized; now I try his patience with relentless questions about the current mess. Given the unfortunate timeliness of his topic, he’d better get used to it. I caught up with him this weekend; he was in London, and generously agreed to answer some more questions by e-mail:
Interview at the source: New Yorker.
How Obama Can Fix the Economy
by Liaquat Ahamed
Injecting money into the banking system won’t be enough to turn things around.
Ever since the banking panics of the 19th century, the formula for dealing with bank runs has been well known: inject so much money into banks that depositors, reassured they could get their money whenever they wanted to, will keep their money in the banks. That is in effect what governments around the world did in the first two week of October.
They guaranteed deposits and then the vast pool of money market funds. They unveiled unprecedented measures to infuse public money into the largest banks in the world, becoming share holders and active deal-makers in the process. With somewhat less fanfare, central banks injected vast amounts of liquidity—as of October 23, the Federal Reserve alone was providing almost $2 trillion in loans to the banking system.
Complete at the source.
Liaquat Ahamed is the author of Lords of Finance: The Bankers Who Broke the World, a book about the causes of the Great Depression to be published by Penguin Press in January 2009. After working as an economist at the World Bank, he spent twenty-five years as a professional investment manager in London and New York.