Reviews for Lords of Finance : The Bankers Who Broke the World

Book News Reviews
Ahamed, a professional investment manager who advises several hedge fund groups and who has worked at the World Bank, tells the stories of the men in charge of the four principal central banks of the world after World War I, Montagu Norman of the Bank of England, Émile Moreau of the Banque de France, Hjalmar Schacht of the Reichsbank in Germany, and Benjamin Strong of the Federal Reserve Bank of New York, who attempted to reconstruct international finance after World War I and return to the gold standard. He describes how, in the mid-1920s, they appeared to succeed in stabilizing the world's currencies, aiding the flow of capital, and creating economic growth, and the subsequent problems that lead to the Great Depression. He includes discussion of economist John Maynard Keynes' dissenting views. Annotation ©2009 Book News, Inc., Portland, OR (

Booklist Reviews 2009 February #1
Investment manager Ahamed tells the fascinating story of the Great Depression and the central bankers whose decisions were the primary cause of the economic meltdown from 1929 to 1933. They were Montagu Norman of the Bank of England, Emile Moreau of the Banque de France, Hjalmar Schacht of the Reichsbank, and Benjamin Strong of the New York Federal Reserve Bank. Interrelated crises not unlike modern events included Germany s recession prompted by the halt of American capital to Europe in 1928 (similar to the Mexican peso crisis of 1994); the collapse of the stock market in 1929 (parallel to the market fall in 2000); the sequence of banking panics from 1930-33 (much like the credit crunch in 2007-08); and the European financial crisis of 1931 (not unlike the emerging markets crisis in 1997-98). Although not exact comparisons, they offer excellent lessons, and Ahamed concludes that the Great Depression was not an "act of God," but resulted directly from a series of collective blunders in economic policy. Excellent book. Copyright 2009 Booklist Reviews.

Choice Reviews 2009 September
Ahamed, an investment banker, has written an engrossing biographical history of four central bankers who played key roles in reconstructing the gold standard after WW I: Mortagu Norman of the Bank of England, Emile Moreau of the Banque de France, Hjalmar Schacht of the Reichsbank, and Benjamin Strong of the Federal Bank of New York. In many ways his book is a biographical companion to Barry Eichengreen's Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (CH, Dec'92, 30-2190), which argued that the gold standard increased the severity of the Great Depression. Ahamed also blames the gold standard for the severity of the Great Depression and presents the economics of the argument in an accessible way. But he intertwines this core argument with fascinating biographies of the key players. His writing style makes the 500 pages seem short. Summing Up: Highly recommended. General readers and all levels of undergraduate students. Copyright 2009 American Library Association.

Kirkus Reviews 2008 December #2
Erudite, entertaining macroeconomic history of the lead-up to the Great Depression as seen through the careers of the West's principal bankers.Investment manager Ahamed sets the stage for his story with Toynbeean sweep. The gold standard, to which the major currencies of the world were tied, was thrown into tumult by World War I. France, Britain and Germany found themselves depleted of gold reserves. The United States, a new economic power holding the bulk of the world's gold bullion, demanded repayment of loans made to its allies; this forced large, untenable reparation payments on Germany. The main characters of this unfolding drama were a quartet of bankers who saw themselves as "elite tribunes, standing above the fray of politics, national resentments, and amateur nostrums," and who wielded astonishing, autonomous authority over monetary policy. Eccentric, aristocratic Montagu Norman of the Bank of England dealt with the problem of inadequate gold reserves to support the overvalued pound sterling by convincing Benjamin Strong, head of the Federal Reserve Bank of New York, to lower interest rates in America to encourage the flow of gold back to Europe. This directly fueled the U.S. stock-market bubble, Ahamed argues. The crash of 1929 and the worldwide depression that followed were the inevitable results. Other catalysts included the Reichsbank's irascible, unpredictable Hjalmar Schacht, whose obsession with eliminating reparations led Germany to the brink of default, and vindictive Émile Moreau, whose policy at the Banque de France aimed to destabilize the British pound. Ahamed compares these bankers to the Greek mythological character Sisyphus, condemned to eternal, endless effort. "Their goal is a strong economy and stable prices," he writes. "This is, however, the very environment that breeds the sort of overoptimism and speculation that eventually ends up destabilizing the economy." Ahamed soberingly suggests that, "bubbles and crises seem to be deep-rooted in human nature and inherent to the capitalist system."Spellbinding, insightful and, perhaps most important, timely.Author events in New York and Washington, D.C. Copyright Kirkus 2008 Kirkus/BPI Communications.All rights reserved.

Library Journal Reviews 2009 March #1

In this historical study, Ahamed, a professional money manager, sums up the causes of the Great Depression as a series of economic policy blunders that could have been avoided. He cites as causal factors the inflationary financing of World War I by printing money, the insurmountable war debts of Germany and the Allies, Germany's plunge into hyperinflation, and the return of most currencies to the gold standard at excessive and deflationary prewar rates. For example, he explains that when the U.S. stock market bubble burst in 1929 and economic activity collapsed, the central banks were restrained in stimulating the economy for fear of losing their gold reserves. In an epilog, Ahamed draws parallels between the crises of the Great Depression and those in recent times. He keeps his history interesting by highlighting the personalities of the heads of the major central banks, and he employs the economist John Maynard Keynes as a one-man Greek chorus critiquing the bankers' actions. This erudite and exceedingly well-written tale of financial chaos in the 1920s and 1930s is both timely and instructive for today's economic climate. Highly recommended for all academic and most public libraries.--Lawrence Maxted, Gannon Univ. Lib., Erie, PA

[Page 80]. Copyright 2009 Reed Business Information.

Publishers Weekly Reviews 2008 December #1

If you think today's economy is scary, check out the Jazz Age horrors chronicled in this financial history of the interwar years and the central bankers who blighted them. Ahamed, an investment manager, surveys the economic upheavals of the 1920s and 1930s, when crushing war debts and reparations from WWI sparked hyperinflation in Germany and a host of lesser eruptions, all of it climaxing in the American stock market crash and the Great Depression. He tells the story through the central bank chiefs of Britain, France, Germany and the United States as they confront unprecedented crises while "shackled" by the "dead hand" of the gold standard, the era's reigning financial orthodoxy (economist John Maynard Keynes, foe of gold and apostle of economic activism, is the book's hero). The author injects unnecessary commentary about the bankers' neuroses and marital difficulties into his coverage of interest rate and currency fluctuations (New York Federal Reserve head Benjamin Strong, he notes, possessed a "large nose that spoke of ruthlessness"). Fortunately, his protagonists' high-wire efforts to stave off national bankruptcies furnish Ahamed with plenty of drama to highlight his engrossing analysis of the complexities of monetary policy. Photos. (Jan.)

[Page 43]. Copyright 2008 Reed Business Information.