College students studying economics and finance do not read books that are more than 30 years old. I have noticed that one common notion about the field of economics is that it often ignores the lessons of history.

I am briefly jotting down what I have learned from 'Lords of Finance' here.

I think the timing of the release added more weight to it, and in some sense, made it even more relevant.īut the book is just as relevant today as it was back then. It was released during the Great Recession of 2008. The release of the book, in 2009, was timed incredibly well. Liaquat points out that such adherence to outdated ideas, such as the 'financial prudence' of the gold standard, created great risks. Montagu Norman had a very 'rigid, almost theological belief' in the gold standard. The most famous of these 'Lords of Finance' was Montagu Norman. The four bankers were Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Hjalmar Schacht of the German Reichsbank, and Emile Moreau of the Banque de France. Liaquat couldn't help but see the similarities between this committee and the heads of the four main central banks during the 1920s who would be held responsible by many for the Great Depression during the 1930s. Ten years on, in 2008, Greenspan's very liberal fiscal policies were blamed by many for pushing the American economy off the edge during the Great Recession of 2008. Written way back in 1999, the article built hype over a committee comprising Alan Greenspan, Robert Rubin and Larry Summers.ĭuring the 1990s and 2000s, these men were considered the alchemists of the financial world, the wise sages who could never go wrong.

The book's investment manager author, Liaquat Ahamed, came up with the idea for the book while reading a Time magazine story titled, 'A Committee to Save the World'. It won the Pulitzer Prize in 2010, and the Financial Times and Goldman Sachs Business Book of the Year Award in 2009. 'Lords of Finance: The Bankers Who Broke the World' by Liaquat Ahamed is a fantastic book, probably one of the most extraordinary economics and finance books ever written!

Lords of finance