In Too Big To Fail, Andrew Ross Sorkin gives a comprehensive account of the 2008 financial crisis and the key players involved. Although somewhat lengthy and sometimes dense, Sorkin gives sufficient background history on the Wall Street CEOs and governmental regulators in order to better understand how they collectively approached the financial crisis.
While Sorkin highlights many different and competing interests, one of the most notable conflicts was the constant strife between the federal government and the Wall Street banks. In more than one instance, the government used the media to publicly alert the big banks of its intentions, instead of privately informing them. As a surprise to many of the CEOs, Henry Paulson, the treasury secretary, leaked information to the press that there would not be any government bailout to Lehman Brothers.
When the governmental regulators decided the Lehman Brothers should file for bankruptcy and almost announced it before Lehman filed is another instance that highlights the constant strife between Wall Street and the governmental regulators. Paulson and Charles Cox, the chairman of the Securities and Exchange Commission, decided for Lehman that they should file for bankruptcy. To better manage the crisis and minimize panic, Cox planned a press conference to announce the filing. However, Lehman Brothers did not file for bankruptcy yet; they were waiting on approval from their board. Then, Paulson strictly orders Cox to call the Lehman board and directs them to file for bankruptcy. “The decision on whether to file for bankruptcy protection is one that the board needs to make. It is not the government’s decision,” Cox told the Lehman board. He then adds, “But we believe that in your earlier meetings with the Fed, it was made quite clear what the preference of the government is” (Sorkin 370). The board realized it was extremely unusual for the chairman of the SEC to call during a board of directors meeting and highly unusual for the chairman to urge the company to go bankrupt.
Although dense, this New York Times bestseller can be used as an excellent addition to any crisis communications course. Sorkin presents the details of the bailout in a very readable format, and presents internal discussions within the corporations and the government. In an economic system that relies on perceptions and confidence, a substantial amount of the crisis management focused on containing panic and boosting the confidence of stakeholders and the policy makers involved. Therefore, I recommend this book to be used in future public relations courses. To end, Too Big To Fail is an excellent example of crisis communication and management.
Jamal Little
University of North Carolina-Chapel Hill
While Sorkin highlights many different and competing interests, one of the most notable conflicts was the constant strife between the federal government and the Wall Street banks. In more than one instance, the government used the media to publicly alert the big banks of its intentions, instead of privately informing them. As a surprise to many of the CEOs, Henry Paulson, the treasury secretary, leaked information to the press that there would not be any government bailout to Lehman Brothers.
When the governmental regulators decided the Lehman Brothers should file for bankruptcy and almost announced it before Lehman filed is another instance that highlights the constant strife between Wall Street and the governmental regulators. Paulson and Charles Cox, the chairman of the Securities and Exchange Commission, decided for Lehman that they should file for bankruptcy. To better manage the crisis and minimize panic, Cox planned a press conference to announce the filing. However, Lehman Brothers did not file for bankruptcy yet; they were waiting on approval from their board. Then, Paulson strictly orders Cox to call the Lehman board and directs them to file for bankruptcy. “The decision on whether to file for bankruptcy protection is one that the board needs to make. It is not the government’s decision,” Cox told the Lehman board. He then adds, “But we believe that in your earlier meetings with the Fed, it was made quite clear what the preference of the government is” (Sorkin 370). The board realized it was extremely unusual for the chairman of the SEC to call during a board of directors meeting and highly unusual for the chairman to urge the company to go bankrupt.
Although dense, this New York Times bestseller can be used as an excellent addition to any crisis communications course. Sorkin presents the details of the bailout in a very readable format, and presents internal discussions within the corporations and the government. In an economic system that relies on perceptions and confidence, a substantial amount of the crisis management focused on containing panic and boosting the confidence of stakeholders and the policy makers involved. Therefore, I recommend this book to be used in future public relations courses. To end, Too Big To Fail is an excellent example of crisis communication and management.
Jamal Little
University of North Carolina-Chapel Hill