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Stress Test: Reflections on Financial Crises

In This Review

Stress Test: Reflections on Financial Crises
By Timothy F. Geithner
Crown, 2014
592 pp. $35.00
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The financial crisis of 2008 was the worst the United States had faced since 1930. At the time, Geithner was the president of the Federal Reserve Bank of New York; the following year, he become treasury secretary. Along with Ben Bernanke, then chair of the U.S. Federal Reserve, and Henry Paulson, then treasury secretary, Geithner took the lead in preventing the crisis from creating another Great Depression—which it very well could have done. He recounts those harrowing days in clear and gripping prose and persuasively justifies the often unpopular actions the federal government took, arguing that they were the least bad options available in a potentially catastrophic situation. He shreds the common charge that during the crisis, he was biased in favor of the big banks and valued Wall Street over Main Street. In dealing with the fallout from the 2008 crisis, Geithner focused on saving the banking system first because, he explains, the collapse of Wall Street would have devastated Main Street. (It’s worth noting that, unlike many other senior regulatory officials, Geithner had never worked in banking, and his long career as a technocrat had included a useful stint at the Treasury Department during the 1990s, when financial crises roiled Mexico, South Korea, and Thailand.) Geithner captures well the frustration that harried officials feel when dealing with grandstanding members of Congress and technically ignorant journalists, but he also concedes that during the crisis, his communication skills were not always impressive—a flaw that is thankfully not apparent in this important insider’s account of a disaster averted.