O'Reilly logo

The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How to Prevent Them in the Future by John Authers

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 26. Banks Bounce

“After a crash has occurred, it is important to wait long enough for the insolvent firms to fail, but not so long as to let the crisis spread to the solvent firms that need liquidity—‘delaying the death of the strong swimmers’.”

Charles P. Kindleberger1

World markets only recovered once investors grew confident that no more big banks would fail or be nationalized. That started a “positive feedback” loop, as confidence made financing easier to obtain in many markets. Governments won that confidence by treating banks with exceptional generosity.

The news that revived world markets came in an internal memo. From October 2008 to March 2009, Citigroup had needed four infusions from the U.S. government to stay afloat. Its ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required