This week on WEALTHTRACK we discuss the lessons learned and ignored from the powerful central bankers of a century ago. Financial Thought Leader Liaquat Ahamed, the Pulitzer Prize winning author of Lords of Financediscusses the differences and similarities between central bank policies today and those leading up to the Great Depression.
Liaquat Ahamed Author Lords of Finance: The Bankers Who Broke the World
CONSUELO MACK: This week on WEALTHTRACK, financial thought leader Liaquat Ahamed won a Pulitzer Prize for his The Lords of Finance: The Bankers Who Broke the World portrayal of the four central bankers who shaped the global financial system after World War I and leading up to the Great Depression. He shares the lessons learned and mistakes being repeated by central bankers today. Next on Consuelo Mack WEALTHTRACK.
Hello and welcome to this edition of WEALTHTRACK, I’m Consuelo Mack.
Every once in a while we take a break from analyzing current events and news and try to get a different perspective and a greater understanding of what is affecting our financial lives. That’s what we are doing this week. Ever since we recommended the Pulitzer Prize winning book, The Lords of Finance: The Bankers Who Broke the World for our WEALTHTRACK Bookshelf several years ago, I have been meaning to get in touch with its author Liaquat Ahamed to pick his brain about the four powerful central bankers he profiled from the early twentieth century who were basically in charge of the world’s financial architecture coming out of World War I and going into the Great Depression.
They represented the financial centers, largely private of the four economic powerhouses of the time.
There was Montagu Norman of the Bank of England, Emile Moreau of the Banque de France, Hjalmar Schacht of the Reichsbank and Benjamin Strong of the Federal Reserve Bank of New York. How powerful were they? How did we go from the roaring twenties to the desperate thirties? Are their lessons to be learned from their experiences and have we absorbed any?
Liaquat Ahamed came to the topic from his own experience in the investment business, including during some financial crises. From 2001-2004 he was Chief Executive Officer of Fischer Francis Trees & Watts, a fixed income investment management firm and subsidiary of BNP Paribas. Before that he was the firm’s Chief Investment Officer. He was also the Head of the Investment Division of the World Bank.
I started the interview by asking Ahamed what led him to write a history of four central bankers from another era.
LIAQUAT AHAMED: I was in the investment management business and in the late ‘90s, lost a ton of money during the Asian crisis. So that was ’97. And I thought, well, I’d better learn about financial crises because it looked as if we were getting more and more of them. We’d had ’82, ’87, ’90, ’94, Mexico. And started reading up about past financial crises, and obviously the mother of them all was the Great Depression.