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13 Bankers: The Wall Street Takeover and the Next Financial Meltdown

3.83  ·  Rating Details  ·  2,470 Ratings  ·  191 Reviews
In spite of its key role in creating the ruinous financial crisis of 2008, the American banking industry has grown bigger, more profitable, and more resistant to regulation than ever. Anchored by six megabanks whose assets amount to more than 60 percent of the country’s gross domestic product, this oligarchy proved it could first hold the global economy hostage and then us ...more
Paperback, 336 pages
Published January 11th 2011 by Vintage (first published 2010)
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Converse

I don't know why I keep reading about the financial crisis of 2008, it just makes me angry. Anyway, this is a one of the several good books I've read on the subject. It has a longer term focus than some, including a section on the history of banking in the United Staes since the founding of the republic, and doesn't give a blow by blow description of what happened in the week that Lehman brothers failed. Rather, it is more about how the banks and the regulatory system got into this fix in the f

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Elaine Nelson
Some things that I bookmarked while reading:

"the core function of finance is financial intermediation -- moving money from a place where it is currently not needed to a place where it is needed. The key questions for for any financial innovation are whether it increases financial intermediation and whether that is a good thing." (continues to talk about "innovations" in credit cards mostly being ways of making pricing more complex)

"much of the positive effect of homeownership is due not to owner
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Leo Jacobowitz
Nov 04, 2011 Leo Jacobowitz rated it really liked it  ·  review of another edition
Is the American form of government a democracy and secondarily, is the economic system a market capitalist one?

According to the authors of 13 bankers the answer to both questions is a resounding, "No!" Kwak and Johnson are well known in financial circles for their highly influential blog, the Baseline Scenario. The authors clearly detail the causes behind the global financial credit crisis which has persisted since 2008. To the authors, the primary reason for the crisis can be traced to the poli
...more
Laura
Jun 23, 2012 Laura rated it liked it  ·  review of another edition
Shelves: economics, nonfiction
Rather than a review of 13 Bankers, I am wrestling with understanding the response to the book. It makes me feel like I’m missing something and did not get the secret decoder ring.
Unlike most books that explore the 2008 financial collapse, this book looks back to the political viewpoints of Jefferson and Hamilton. In a nutshell, Jefferson didn’t trust big government. In addition to that, he didn’t trust any highly centralized power and this included the banks. In contrast, Hamilton did trust a
...more
Kathy Scantle
May 04, 2010 Kathy Scantle rated it really liked it  ·  review of another edition
The authors' basic premise in this book is that the only way to prevent future financial crisis is to downsize banks that are too big to fail. They describe the history of banking in the US concentrating on the presidencies of Jefferson, Jackson, Teddy Roosevelt, Franklin Roosevelt, Reagan, George H. W. Bush, Clinton, George W. Bush and Obama. The authors see the big banks as oligarchies with enormous political power. (Surprise, I laugh.) The book was tedious reading at times and I'm glad there ...more
Satyaki Mitra
This book penned by two of the most vocal commentators on the 2008 financial crisis, takes a systematic approach to uncover the causative factors which helped trigger the crisis and brought the entire American economy to a standstill.

The book starts with the origin of modern banking in the United States, dating back to the late 18th century and the First Bank of the United States, and henceforth goes on to narrate the influential role that finance would come to play in the future; the contrastin
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Raghu
Jun 21, 2010 Raghu rated it it was amazing  ·  review of another edition
This is the best book I have read on the recent financial crisis of 2008. The authors present a historical study of how and why it happened and show why it will happen again if the US govt does not go through with breaking up financial institutions which are 'too big to fail'. Both the Bush and Obama administrations have allowed the big banks to remain BIG thereby allowing them to bring the world economy into crisis again by taking the extraordinary risks that they took to get us there in the fi ...more
Douglas White
While I think this book is a good history of the regulation changes that occurred in banking from the mid to late 90s, I do not think this book does that great a job explaining the recent banking crisis. The authors clearly believe that the changes in regulation and lax regulators caused the crisis and that better/stronger regulation would fix it. They however fail to explain how if the regulators are so co-opted by the big banks that regulation on its own will work. I also feel that the authors ...more
Steve
Jun 03, 2010 Steve rated it liked it  ·  review of another edition
Shelves: economics
What happens when free market true believers meet predatory bankers? Financial oligarchy, says Former IMF economist Simon Johnson and that describes the USA today. For example, how many high-level government officials are former Goldman Sachs people? Lots. And if the government officals aren’t Wall Street insiders, they are free market ideologues. Take Alan Greenspan for example. He was apparently so convinced that markets could regulate themselves that he believed rules against fraud were unnec ...more
Lobstergirl
Oct 29, 2011 Lobstergirl rated it it was amazing  ·  review of another edition
Recommends it for: Everyone
Shelves: business-finance
This is a superb explanation of how the supremacy of Wall Street, and its cosiness to Washington, helped cause the financial crisis, and made true reform afterward much more difficult. Johnson and Kwak go back as far as Thomas Jefferson and Andrew Jackson to examine the nexus of politics and banking. They explain why bankers and politicians are so close, and why politicians always seem to bend to the will of the banksters: it's not just about campaign contributions (traditional capital), or the ...more
Tommy
Apr 30, 2010 Tommy rated it it was amazing  ·  review of another edition
Shelves: economy, non-fiction
This book was terrific overview of the history of the US financial system going back to Hamilton and Jefferson and goes in depth to describe how we got where we are. Simon and James do an amazing job of diagnosing the problems.

They contend that too big to fail banks simultaneously pose too much systemic to the economy AND have too much political sway to make effective regulation and oversight possible. This is very much in line with the views of Nobel Prize winners Joseph Stiglitz and Paul Krug
...more
Greg Linster
Mar 28, 2012 Greg Linster rated it really liked it  ·  review of another edition
Oligarchy, n., a government in which a small group exercises control especially for corrupt and selfish purposes.

The United States is ruled by an oligarchy that, despite almost wrecking the world economy, has only grown more powerful and more resistant to change. Perched atop this structure are 13 bankers who are involved with the six mega-banks (Bank of America, JPMorgan, Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley) that have been rendered “too big too fail”. How did this h
...more
Erica
Jun 26, 2016 Erica rated it really liked it  ·  review of another edition
Reading one of the wave of post-financial crisis books in 2106? Feels so 2010? This was one of the wave of audiobooks I downloaded with my Audible subscription back then, then forgot about until recently. But I'm glad I went back to it.

This book is a great dive into our long, complex political relationship with the financial industry, from Jefferson and Hamilton through the aftermath of the financial crisis in 2008. Johnson and Kwak analyze the history of financial crises, bank regulation and d
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Dan Cohen

This is a well-written book and it feels like the authors know what they're writing about. It takes a historical perspective and the specifics of the crisis of 2007-2008 are covered quite sparingly. Nevertheless, the authors captured most of the salient points, as I understand them, and did so in remarkably few words. So, it's a really good introduction to the crisis along with some very useful historical perspective.

Where the book falls down for me is in being too partisan (very partisan US non
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Laurie
Dec 29, 2015 Laurie rated it really liked it  ·  review of another edition
Ronald Reagan – Alan Greenspan; deregulation.

Bill Clinton – balanced budget; home ownership; Goldman Sachs in his administration.

George W Bush – Iraq War; Afghanistan War; financial meltdown; more Goldman Sachs.

Barak Obama – T.A.R.P.; financial bail out; more Goldman Sachs.

DEregulation and DErivatives = DEpressed economy!

(This is the text version of a diagram I sketched in my paper Book Lust Journal, and this is also the last post to be transferred from that journal to here!)

Banks took crazy ris
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Owen
Sep 20, 2015 Owen rated it liked it  ·  review of another edition
This is yet another book outraged at the moral hazard of the banking crisis, and the government’s impotent regulatory response to it. The titular gimmick refers to there having been 13 bankers in meetings with the Treasury Secretary across several crises. It's a pretty accessible read, but approaches the crisis from a slightly different perspective than previous books I've read on the subject.

This author appears to have a much better sense of the regulatory environment than any of the other book
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Patrick
Jun 09, 2015 Patrick rated it really liked it  ·  review of another edition
Shelves: economics
Great grand-scope history of the recent financial meltdown. Although a background in economics is suggested, it is not necessary in order to understand the majority of the concepts outlined in this book.

While reading this, I have noticed several commentators warning about the perils of regulation and interference with the financial sector, overgeneralizing while ignoring the specific practices that contributed to global downturn. One of the basic, most salient points offered is that prior to the
...more
Dan
Aug 10, 2014 Dan rated it really liked it  ·  review of another edition
Johnson presents a clear critique of our current financial system. It's no surprise that the financial services industry wants to take big bets with borrowed money, take home outsized profits, and socialize the risk. The real surprise and tragedy in this book is the extent to which the policy makers in the US, UK, and other democracies -- whether they are from the parties allied with business or "progressives" -- fail to imagine any other system. And don't count on much popular support for refor ...more
Christina Boyle
Nov 08, 2015 Christina Boyle rated it really liked it  ·  review of another edition
This book is incredibly well written and well researched. It covers well trod territory on why and how the credit crisis of 2009 occurred. It's main punchline which is really interesting is a recommendation to impose a size cap on the largest financial institutions in the form of assets as a % of GDP cap. It's simple and seemingly uncomplex to implement and would be effective if paired with existing regulation.

The MIT professors are recommending 2-4% which reflects percentage wise the nature of
...more
Mary Jo
Jun 26, 2010 Mary Jo rated it it was amazing  ·  review of another edition
I think this is the best book on the economic meltdown as it provides historical, political and societal context. It reminds me that the proposed financial fixes are unlikely to fix the broken system.
Ob-jonny
Oct 23, 2010 Ob-jonny rated it really liked it  ·  review of another edition
This is a very smart book describing why the financial crisis happened and why it will likely happen again because of how little has been done with the so-called financial reform.
R. Hill
Oct 27, 2015 R. Hill rated it really liked it  ·  review of another edition
Presents some very interesting facts about the status of the American banking system today and a very detailed analysis of how we got to where we are. A well researched history of our banking system. Worth the time even though it was quite slow in places. Johnson (the lead author) knows what he is talking about as he was a former chief economist for the IMF! His bottom line solution is to break up the Too Big To Fail (TBTF) Banks now before we have another financial crises. If we don't then the ...more
Rob
Dec 04, 2011 Rob rated it really liked it  ·  review of another edition
Simon Johnson should run Treasury.
Carlos Burga
I found this book utterly riveting. Johnson and Kwak take the reader in a journey to understand why the Great Recession happened and how its underlying causes were left unchanged. The authors take pains to illustrate how the evolution of the US financial system went through phases of booms and busts that were only stabilized by the tight regulations imposed after the Great Depression and how the trend towards deregulation, pursued by both Democrat and Republican administrations, has returned the ...more
Arbraxan
Published in 2010 by Simon Johnson and James Kwak, this book describes the alleged takeover of the U.S. financial industry, the regulatory institutions tasked with supervising it and the political system supposed to elect independent legislators by a small group of megabanks. It is to this financial oligarchy, which has become even more concentrated (Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, Wells Fargo, and J.P. Morgan Chase, I'm looking at you) since the 2007-08 financial cris ...more
Justin Tapp
Jun 12, 2014 Justin Tapp rated it really liked it
Johnson and Kwak's blog was essential reading during the financial crisis, and is still quite educational. This book is also required for Money & Banking in the fall. (I'm a bit sad because I went way over the Amazon clipping limit, so 314 of my highlights are invisible via the website.)

Johnson approaches the U.S. financial crisis from the point of view of a former Chief Economist of the IMF. That perspective allows him to see the irony of how the U.S. and the IMF advised East Asian countrie
...more
Jeff
Feb 20, 2011 Jeff rated it liked it  ·  review of another edition
This book provides a strong argument for better regulation of financial institutions and markets. The authors pose the ideas of democracy and free markets in opposition, citing trends over the past 100 years of institutional lobbying, congressional campaign donations, deregulation, and soaring profits for firms. Americans have changed their perception of Wall Street as well. What was once considered scandalous compensation for executives in investment firms in the 1980s is now worshiped and expe ...more
Tim
Jan 31, 2011 Tim rated it really liked it  ·  review of another edition
There are so many perspectives with which to view the 2008 financial crisis. Some, like Andrew Ross Sorkin's TBTF deal with the banking and government personalities who made key decisions (or non-decisions) around the headline events of the crisis. Others dive deep into the technical details, covering items like the miscalculation of risk in super senior tranches of synthetic CDOs. Many of these treatments deal with proximate causes of the crisis. 13 Bankers though creates a narrative around how ...more
Lynn
May 05, 2010 Lynn rated it liked it  ·  review of another edition
Before opening the book I knew what I was getting into. The two authors were guests on Bill Moyers and I chalked up their more blatant biases as deference to Moyers. It was unlikely that I would find a fair account of the financial crisis, but I hoped to obtain a clear understanding for the reasons why most of the blame should be placed on Wall Street. I did obtain a clear understanding of the thought processes of the authors, but they were not clear or honest when supporting their beliefs about ...more
Frank Staheli
Jun 05, 2010 Frank Staheli rated it really liked it  ·  review of another edition
Although I do not agree with some of the suggested solutions for the financial problems in our country, I agree with the sentiment of the book, that Too Big To Fail is Too Big. This book is well worth reading. Its identification of the history and problems of Wall Street is, I think, very accurate.

I would rather have allowed the big investment banks, like Goldman Sachs, to fail, whereas the authors think that regulatory law should be modified to not allow such entities to own assets equaling mor
...more
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Simon Johnson is a British American economist. He currently is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management. He has held a wide variety of academic and policy-related positions, including Professor of Economics at Duke University's Fuqua School of Business. From March 2007 through the end of August 2008, he was Chief Economist of the International Monetar ...more
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