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Hot Topics: Financial Crisis and Bailout

The articles, books and other resources listed below will discuss the financial crisis and evolving effects of the bailouts on the global economy.

Selected articles

Due to contractual arrangements, access to some articles may be restricted to the Stanford community, and subscribers of the "Library Databases" offered through the GSB Alumni's Lifelong Learning Program. Inclusion below does not imply University endorsement of the ideas expressed.

 

Trauma Surgeon of Wall Street. New York Times, 11/13/09
Mr. Cohen, the chairman of Sullivan & Cromwell and the man who, aside from government officials like Henry M. Paulson Jr., Ben S. Bernanke and Timothy F. Geithner, played perhaps the largest role of all in the gruesome doings of the Wall Street bailout last year.
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Trying to Rein In ‘Too Big to Fail’ Institutions. New York Times, 10/25/09
Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.
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Nobel Laureate Sharpe expounds economic advice. The Stanford Daily, 10/8/09
Audience members could not decide between laughter and bafflement last night as William Sharpe, Nobel Laureate in economics, jovially explained how futile it is to place faith in financial experts.
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Debt-Market Paralysis Deepens Credit Drought. New York Times, 10/6/09
A year after Washington rescued the big names of American finance, it’s still hard to get a loan. But the problem isn’t just tight-fisted banks.
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Geithner Says Bailout Programs Are Shrinking. New York Times, 9/10/09
One year after the federal government began the biggest financial bailout in history, President Obama’s top economic advisers say the banking system has regained enough health to begin removing the government’s backstops.
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Market crisis 'will happen again'. BBC News, 9/8/09
The world will suffer another financial crisis, former Federal Reserve chief Alan Greenspan has told the BBC.
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U.S. banks play catch-up on hiring effort. Reuters, 8/10/09
U.S. banks, which have cut thousands of jobs during the two-year-old financial crisis, are suddenly racing to fill empty seats to make the most of soaring stock markets and narrowing credit spreads.
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Two Giants Emerge From Wall Street Ruins. New York Times, 7/16/09
A new order is emerging on Wall Street after the worst crisis since the Great Depression — one in which just a couple of victors are starting to tower over the handful of financial titans that used to dominate the industry.
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The Descent of Finance. Harvard Business Review, July/Aug 2009
When today’s great crisis ends, the U.S. financial system will be a shadow of its former self, but America will be stronger than ever. History shows that money and power don’t always go hand in hand.
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Summers Sees Dramatic Shift With Banking Reforms. NPR, 6/18/09
Summers, the director of President Obama's National Economic Council, defends the president's financial regulatory reform plan, saying it will result in a "very different financial industry."
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10 Large Banks Allowed to Exit U.S. Aid Program. New York Times, 6/9/09
The Obama administration marked a major milestone in its bank rescue effort — its decision on Tuesday to let 10 big banks repay federal aid — as policy makers and industry executives focused on the challenges still before them.
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As Deficits Mount, Fed Chief Calls for a Path to Fiscal Balance. New York Times, 6/3/09
Ben S. Bernanke, said on Wednesday that the United States needed to develop a plan to restore fiscal balance, even as the government builds huge budget deficits as it tries to spend its way out of the worst economic crisis since the Great Depression.
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More Articles

In Crisis, Banks Dig In for Fight Against Rules. New York Times, 5/31/09
As the financial crisis entered one of its darkest phases in October, a handful of the nation’s largest banks began holding daily telephone sessions. During their calls: how to counter an expected attempt to rein in credit-default swaps and other derivatives — the sophisticated and profitable financial instruments that were intended to limit risk but instead had helped take the economy to the brink of disaster.
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Banks Are Facing Restrictions On Repaying TARP. CNBC, 5/19/09
Banks that want to repay the billions of dollars of government bailout funds they received from the TARP are facing several restrictions, including how soon and under what conditions the money can be returned, sources told CNBC.
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New Worries for Next Tier of Banks. New York Times, 4/24/09
Absent fresh details on how the nation’s 19 largest banks fared in a new government test of their health, analysts are turning the spotlight on a handful of major regional banks that they reckon may be the next weak links in the financial industry.
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Why Creditors Should Suffer, Too. New York Times, 4/4/09
The Obama administration’s proposals to reform financial regulation sound ambitious enough as they aim to bring companies like A.I.G. under a broader umbrella of government rule-making and scrutiny.
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Some Banks, Feeling Chained, Want to Return Bailout Money. New York Times, 3/10/09
As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.
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Will the banks survive? Fortune, 2/27/09
How can it be that the banks are tottering after the government fortified them with hundreds of billions in bailout cash and guarantees on their troubled assets?
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The World According to TARP. Fortune, 2/16/09
Four months and $314 billion into the federal government's attempt to stabilize the financial system, Fortune looks at where your money has gone and whether the recipients are healthy.
View article Stanford Network

Banks in Need of Even More Bailout Money. New York Times, 1/13/09
Even before word came on Tuesday that Citigroup might split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama’s transition team: the banks need more taxpayer money.
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The End of the Financial World as We Know It. New York Times, 1/3/09
Incredibly, intelligent people the world over remain willing to lend us money and even listen to our advice; they appear not to have realized the full extent of our madness. We have at least a brief chance to cure ourselves. But first we need to ask: of what?
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Lessons From the S&L Bailout. USBanker, January 2009
It's inevitable that today's financial crisis gets compared to the nation's savings and loan bailout, which cost taxpayers about $250 billion in today's dollars.
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Bailout of Long-Term Capital: A Bad Precedent? New York Times, 12/26/08
The financial crisis is a result of many bad decisions, but one of them hasn’t received enough attention: the 1998 bailout of the Long-Term Capital Management hedge fund.
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White House Philosophy Stoked Mortgage Bonfire. New York Times, 12/21/08
The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”
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U.S. Details $800 Billion Loan Plans. New York Times, 11/25/08
The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they would print as much money as needed to revive the nation’s crippled banking system.
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Many Line Up for Cash, but Bailout Plan Falters. New York Times, 11/14/08
As the government’s financial rescue enters a new phase, Wall Street and many ordinary Americans are wondering the same thing: Is any of this working?
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US drops toxic assets bailout. National Business Review, 11/13/08
US Treasury Secretary Hank Paulson has committed a dramatic volte face from the Bush administration’s Wall St bailout plan to purchase toxic subprime mortgages from financial firms.
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U.S. Is Said to Be Urging New Mergers in Banking. New York Times, 10/20/08
In a step that could accelerate a shakeout of the nation’s banks, the Treasury Department hopes to spur a new round of mergers by steering some of the money in its $250 billion rescue package to banks that are willing to buy weaker rivals, according to government officials.
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Drama Behind a $250 Billion Banking Deal. New York Times, 10/14/08
The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.
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Europe: The new Wall Street? Fortune, 10/7/08
Leverage, the menace that helped bring down some of the biggest names on Wall Street, is now threatening the health of big banks across the Atlantic.
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Europe Works to Contain Crisis. New York Times, 10/6/08
European nations scrambled further Monday to prevent a growing credit crisis from bringing down major banks and alarming savers.
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Agency’s ’04 Rule Let Banks Pile Up New Debt. New York Times, 10/2/08
On a bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
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Storm of Fear Enveloped Wachovia. WSJ, 9/30/08
CEO Robert Steel agreed early Monday to a nearly $2 billion deal under which Citigroup Inc. will take over the bulk of Wachovia's operations and assume its senior and subordinated debt.
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New banking rules: tread carefully. Financial Times, 9/30/08
There is a strong populist strain of anti-banking sentiment in the US (vividly demonstrated in Congress this week) and in the UK. Banks are especially unpopular in two circumstances: first, when they are very profitable; and second, when they are very unprofitable.
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EU Proposes Regulatory Overhaul Amid Bailouts. WSJ Europe, 9/30/08
The European Union's top markets official is preparing an overhaul of banking regulation across the continent, as Europe struggles to deal with its own wave of bank failures.
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J.P. Morgan Bets on the Consumer. WSJ, 9/27/08
The largest bank failure in U.S. history sent barely a ripple through financial markets on Friday after J.P. Morgan Chase & Co. stepped in quickly to pick up the pieces of collapsed Washington Mutual Inc. and promised to move quickly to clean up the wreckage of the thrift's troubled portfolio of mortgage loans.
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Shattering Glass-Steagall. Newsweek, 9/15/08
Lehman's failure marks the end of an era.
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The Other Shoe. USBanker, 8/08
Commercial real estate (CRE) is showing signs of weakness, and the results promise to be much more painful for the industry -- particularly community banks, which count CRE lending as a bread-and-butter business.
View article Stanford Network

IndyMac Bank seized by federal regulators. LA Times, 7/12/08
The Pasadena-based thrift’s failure is second in size only to the 1984 failure of Continental Illinois Bank.
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Bank Failures in Banking Panics: Risky Banks or Road Kill? Federal Reserve Bank of Atlanta, Working Paper 2001-13, 7/01
Are banks that fail in banking panics the riskiest ones prior to the panics? The free banking era in the United States provides useful data to examine this question because the assets held by the banks were traded at the New York Stock Exchange. The authors estimate the ex ante riskiness of a bank’s portfolio by examining the portfolio relative to mean-variance frontiers and by examining the bank's leverage and notes relative to assets. The authors find that the ex ante riskiness of a bank’s portfolio helps predict which banks fail and the extent of noteholders’ losses in the event of failure.
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Selected Video

Stanford, GSB Professors Debate Bailout Plan. 9/25/08
Panel discussion ran the gamut from how the U.S. got into this mess; how this crisis fits in with past credit crises; and whether the financial sector is really sufficiently “different’’ than the rest of the economy to warrant a $700 billion rescue courtesy of the American taxpayer.

 

 

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Page updated by: Nora Richardson