The Courage to Act: A Memoir of a Crisis and Its Aftermath

Central bank officials don't normally star in thrillers, but this memoir of the 2008 financial collapse and the Great Recession by the former chairman of the Federal Reserve provides an exception to that rule. Economist Bernanke recounts how his research into financial panics and the Great Depression prepared him to lead the government's response to the 2007%E2%80%938 subprime mortgage crisis and the ensuing collapse of banks and credit. As landmark Wall Street companies implode%E2%80%94including Bear Stearns, Lehmann Brothers, AIG, and Fannie Mae and Freddie Mac%E2%80%94Bernanke and his comrades, Vice Chairman Tim Geithner and Treasury Secretary Henry Paulson, invent new ways to shore them up, arm-twist recalcitrant executives, and flood the economy with loans to stymie panic. The result, he writes, was "a new era of monetary policy activism" that drew intense fire from grandstanding populists. Along the way he unveils the workings of the secretive Fed, from internal wranglings over interest rates to the minute parsings of public statements for jittery markets ("Should I say that additional interest rate cuts %E2%80%98may be necessary' or %E2%80%98may well be necessary'?"). Written in clear, accessible prose, Bernanke's memoir demystifies central banking and high finance with admirable lucidity; it makes an indispensable guide to the 2008 upheaval and the controversial measures that quelled it. Photos. (Oct.)