Too big to fail: A conversation with bestselling author Andrew Ross Sorkin

I recently had the chance to read Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System – and Themselves. The book is a New York Times bestseller, written by Andrew Ross Sorkin chronicling the real life events of the 2008 financial crisis and the collapse of Lehman Brothers.

The book is written from the point of view of Wall Street CEOs, board members, management teams, current and former US government officials, regulators, bankers, lawyers, consultants and other advisers. It is the product of more than 500 hours of interviews with more than 200 individuals who participated directly in the events surrounding the financial crisis. In addition, it provides an overview of the financial crisis of 2007–08 from the beginning of 2008 to the decision to create the Troubled Asset Relief Program (TARP). 

The book tells the story from the perspectives of the leaders of the major financial institutions and the main regulatory authorities, describing in a very detailed manner their everyday discussions and decisions during that difficult period. It was released on October 20, 2009, by Viking Press and was adapted in 2011 for the HBO television movie, Too Big to Fail. It won the 2010 Gerald Loeb Award for Best Business Book, one of The Economist’s Best Books of 2010, one of the Financial Times’s Best Books of 2010, one of Business Weeks’ Best Books of 2010 and CEO’s Best Book 2010. 

As a financial professional and someone who worked in NYC during the financial crisis, I found the book to be both informative and captivating. It was a true honor to recently interview Sorkin, an American journalist, author and a financial columnist for the Times and a co-anchor of CNBC’s Squawk Box. 

He is the founder and editor of DealBook, a financial news service published by the Times, and is also the co-creator for the Showtime series Billions. Sorkin was born to Jewish parents – Joan Ross Sorkin, a playwright, and Laurence T. Sorkin, a partner at the law firm Cahill Gordon & Reindel. He lives with his wife, Pilar, and three children in the New York area.

My wife. She insisted I write it. She appreciated both the gravity of the story – a (hopefully) once in a lifetime story. And I was lucky to be well positioned to tell it having written about Wall Street for over a decade at that point. I saw it as a human story. Lot of people see Wall Street and finance as a story about numbers institutions. But it is actually about people and the decisions they make.

The truth – as unpopular as it may be to say – is the banks used the TARP money to shore up their balance sheets and the taxpayers were paid back and profited. Nobody believes that, but it is factually true.

Every financial crisis is a function of too much debt – leverage in the system. That’s the match that lights the fire every time.

Yes.

Yes, but I don’t think we are likely to see a financial crisis driven by the banks. I am much more worried about the shadow banking system and the possibility of a cyber attack.

That is the popular narrative, “The crisis was a crime and someone big should have gone to jail.” I am less sure. I think there were lower level employees that made terrible, possibly criminal decisions, motivated by greed. At the top, it was different. The CEO’s were motivated by greed – or pride and envy of their peers – but no-one ever found anything demonstrably criminal. And there were a lot of people, including prosecutors, journalists, etc looking for a smoking gun – and it was never found.

I suspect it is – sadly, yes.

The writer received his undergraduate degree in business (cum laude) from Yeshiva University and his MBA with double distinction from Long Island University. He is a financial adviser who resides in New York City, and is involved in Israel based and Jewish advocacy organizations.