Wednesday, November 12, 2014
[Book Review] Stress Test by Timothy F. Geithner
Philip reviews STRESS TEST: REFLECTIONS ON FINANCIAL CRISES by Timothy F. Geithner (Crown Publishers, 2014)
Stress Test refers to the plan that Timothy Geithner, President Obama’s first Treasury Secretary, had to end the financial crisis that began in 2008. Geithner, though, must also have meant the title to refer to what he faced during the frightening times that could have seen the complete collapse of the United States Finance System. A collapse would have caused a subsequent global depression that would have caused unimaginable suffering for millions in the U.S. and worldwide.
Geithner played a major role, as head of the Federal Reserve New York Bank, before becoming Treasury Secretary, in stabilizing the Financial Crisis. This memoir of his experience during these frightening times is engrossing, and possibly surprising to some, even riveting in parts. His account is very frank and candid and Geithner does not hesitate to talk about his shortcomings and the mistakes he made. But he makes a compelling case for why the actions he took, though politically unpopular and widely criticized by members of the right and left, ended the Financial Crisis and the possibility of a worldwide economic crisis.
Perhaps a book many might suspect to be a difficult read, it is not. In fact, it is a fast read, and Geithner makes comprehensible to the lay reader what leveraging, derivatives, hedge funds and other financial activities are and how they or their misuse contributed to the Financial Crisis. This is certainly an important book, one that all people who want to understand what happened to our Financial System should read. Readers will have to make their own judgments on whether Geithner was right or wrong in his actions and if his advice on how to prevent future financial crises is sound.
Philip, Cordova Branch
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