Too Big to Fail: 8 key ideas
The core ideas of Too Big to Fail, each in under a minute, written in our own words. Want the full depth? Get the book.
- IDEA 1 OF 8
The crisis unfolded behind closed doors
Sorkin, a financial journalist, describes the 2008 financial crisis from inside the meetings where bankers and officials tried to stop it.
Drawing on hundreds of interviews, he shows how decisions made in days shaped the world economy.
- IDEA 2 OF 8
Bear Stearns was the first warning
Sorkin describes the rescue of Bear Stearns in early 2008, when the government helped arrange its sale.
It was a sign of deeper problems. In Sorkin's account, the rescue showed regulators that a failing firm could shake the whole market, and that more trouble might follow.
- IDEA 3 OF 8
Officials faced impossible choices
Sorkin describes Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and New York Fed President Timothy Geithner.
They struggled to decide which firms to save. In Sorkin's account, each had to make fast, high-stakes choices with little time and with incomplete information about what would happen next.
- IDEA 4 OF 8
Lehman was allowed to fail
Sorkin describes the weekend when officials failed to find a buyer for Lehman Brothers.
Its bankruptcy caused panic across markets. In Sorkin's account, the failure shocked investors, and that fear spread quickly to other firms that depended on each other.
- IDEA 5 OF 8
AIG was rescued
Days later, the government rescued AIG, an insurance giant, fearing its collapse would bring down the system.
The bailout was enormous. In Sorkin's account, officials believed that letting it fail would hurt many other firms and ordinary people as well.
- IDEA 6 OF 8
Banks were too interconnected
Sorkin shows how banks were connected through complex deals, so one failure threatened all.
This made them too big to fail. In Sorkin's account, because so many firms owed each other money, trouble at one could spread to the rest.
- IDEA 7 OF 8
Congress approved a bailout
Sorkin describes how Congress passed a large rescue programme to stabilise banks.
It was deeply unpopular. In Sorkin's account, many citizens disliked using public money to help banks, but leaders argued that doing nothing was riskier.
- IDEA 8 OF 8
Egos shaped events
Sorkin describes the personalities of bank chiefs, whose pride and rivalries influenced decisions.
Human factors mattered. In Sorkin's account, rivalry, trust and pride between the leaders shaped what they chose to do, as much as the numbers did.
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