A financial crisis can be small and salvageable, such as applying for bankruptcy and starting over from scratch. A financial crisis can also be massive and devastating, such as making a bad investment that will lose you millions of dollars.
Even though financial crises have many long-lasting effects, they are also fascinating in their own way. If you are interested in learning more about the causes of a financial crisis, and about the different ways it can be predicted or prevented, here are 10 financial crisis books that you should consider reading.
1. Stress Test: Reflections on Financial Crises by Timothy F. Geithner
The author of this financial crisis book is a former Secretary of the Treasury for President Barack Obama. In this insightful memoir, he talks about his childhood and his career path, but mostly about how he helped the United States navigate the financial crisis of 2008, which was the worst one since the Great Depression.
Reading this book will give you a clear idea of what the financial crisis looked like from the inside.
2. After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead by Alan S. Blinder
The author of this financial crisis book is a Princeton professor, a Wall Street Journal columnist, and the former vice chairman of the Federal Reserve Board. He gives us a chronological narrative of the events that lead the United States into the financial crisis.
Since history tends to repeat itself, this book also presents us what could be done to help prevent another crisis.
3. House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again by Atif Mian and Amir Sufi
The authors of this book are two economists who explain how an increase in household debt contributed to the financial crisis of 2008 and the Great Recession that followed.
They also argue that the policies in place protect banks and creditors more than they protect the public.
4. The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy by Michael Pettis
The author of this book is an economist and a China expert who states that the different world economies are linked together, more than we might think. He insists that the financial crisis had several effects on the economy and the patterns of more than one nation.
This book offers a thorough analysis of the international trading system.
5. All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera
The authors of this book are business journalists who tell us the story of the many “devils” that helped put together the hell of the financial crisis.
They claim that many players were to blame for what happened, including Wall Street, Main Street, and people who simply wanted to buy a home.
6. Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed
The author of this book has been a professional investment manager for 25 years. In this book, he reveals how the Great Depression, which began in 1929, was mostly the result of the decisions taken by a small group of central bankers.
Unfortunately, even today, the decisions taken by those lords of finances can have devastating impacts on many aspects of our lives.
7. Manias, Panics, and Crashes: A History of Financial Crises by Robert Z. Aliber and Charles P. Kindleberger
The first edition of this book was published in 1978, but many editions have followed. The authors teach us about different financial crises that occured around the world since the early 1980s.
This comprehensive book also explores the different patterns that can lead to a financial crisis, and helps us understand them.
8. Crashed: How a Decade of Financial Crises Changed the World by Adam Tooze
The author of this book is a professor of History teaching at Columbia University. He explains us the different mechanisms at the origin of the crisis of 2008, and how the world responded to it.
This book also describes how the United States, Europe and China had to deal with 10 years of banking problems following this crisis.
9. The Financial Crisis and Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope by John A. Allison
The author of this book is an industry expert who strongly believes the government was responsible for the Great Recession, not the financial institutions.
This thought-provoking book argues that since the government caused the crisis, they will not be able to fix the economy, and that free market capitalism is the only real solution.
10. Makers and Takers: How Wall Street Destroyed Main Street by Rana Foroohar
The author of this book is a finance journalist and global economic analyst. In this book, she recalls how it was made clear, during the 2016 presidential election, that most Americans believed their economy was rigged in favor of the elite.
She also explains how this corrupted financial system helped Donald Trump rise to power, and offers a few ideas on how we could move forward in a better way.