Stress Test

Timothy Geithner spent the years of the 2008 financial crisis at its center, first as president of the Federal Reserve Bank of New York and then as Treasury secretary under Barack Obama. This memoir is his account of how the United States got through the worst financial collapse since the Great Depression, following the arc from boom to bust, rescue and recovery. He writes about the hard, politically costly decisions he made to repair a broken financial system and keep the wider economy from falling with it, and he argues that a small group of officials, working through deep uncertainty and enormous stakes, helped avert a second depression even as they lost the trust of the public.

The book begins with Geithner's childhood spent abroad and his early years as a young Treasury official dealing with the international financial crises of the 1990s. It then turns to his time at the New York Fed before the Wall Street boom ended, where he looks at what he saw, what he did and what he failed to notice. From there he takes the reader into the rooms where the crisis unfolded: the rescue of Bear Stearns, the weekend Lehman Brothers failed, the AIG bailout and the uproar over the firm's bonuses, and the fights inside the Obama administration over his plan to end the crisis, a plan that drew heavy criticism but ultimately worked. He also covers the push for the largest overhaul of financial regulation in more than seventy years.

Geithner goes on to describe the aftershocks: the struggle against high unemployment, bitter political battles over deficits and debt, and Europe's repeated brushes with economic disaster. He admits he is no politician, yet he has pointed things to say about politics, from its pettiness and nastiness to the strain it placed on his family.

Beyond the personal story, the book serves as a guide to how governments might handle the next financial crisis better, since this one will not be the last. Geithner frames it in the end as a hopeful account of public service and of how the American political and financial systems withstood their toughest test.