Photo Credit: Christopher Morris for TIME
Ben Bernanke was recently named TIME Magazine’s Person of the Year. A photo of the Fed Chair’s bookshelf is included alongside his interview in the print edition, and the publication points out that his collection includes the prescient Brookings Press book Too Big To Fail. When first published in 2004, the book’s authors Gary Stern and Ron Feldman cautioned that the belief that some financial institutions were “too big to fail” was a serious problem and they believed the situation was getting worse and needed attention. Unfortunately, Stern and Feldman’s warning went unheeded, and as a result, the U.S. government spent billions of dollars over the past two years rescuing large financial institutions such as Citigroup, AIG, and Bear Stearns.
The paperback edition of Too Big to Fail, published in April 2009, includes a timely new preface, with recommendations that should constitute a core part of any new approach to managing TBTF.