Chapter 2
Lessons Not Learned
Timothy Geithner, who studied Japanese in college and served as the deputy financial attaché at the U.S. embassy in Tokyo in the early 1990s, wrote a memo a few years later to his bosses at the Department of the Treasury, detailing the problems with the Japanese banks. Geithner explained that the country’s banks were riddled with losses and couldn’t raise capital because investors suspected the value of the assets on their balance sheets to be lower than they’d declared. The memo got to Robert Rubin, then Secretary of the Treasury, who was very impressed with Geithner’s analysis and promoted Geithner to Assistant Secretary for International Affairs so he could help with the Asian crisis unfolding after years of zero ...
