Broken Bargain: Bankers, Bailouts and the Struggle to Tame Wall Street
In the 1930s, the U.S. financial sector, battered and humbled by the Great Depression, struck a bargain with the federal government. Bankers gained a safety net in exchange for curbs on their freedom: transparency rules, record-keeping and antifraud measures, and fiduciary responsibilities. While these regulations have changed over time, the underlying bargain played a major role in preserving the stability of the financial markets as well as the larger economy. But in the free-market era of the 1980s and 1990s, Wall Street argued that those rules were no longer needed—and the government agreed. Broken Bargain: Bankers, Bailouts and the Struggle to Tame Wall Street by Kathleen Day ’75 reveals how the recent crisis arose from the neglect of this fundamental bargain and how taxpayers have been left to pay the bill. (Yale University Press, 2018)
Kathleen Day worked for 30 years as a business journalist with the Washington Post, Los Angeles Times, and USA Today before joining the Johns Hopkins Carey Business School as a professor of financial crises in 2013. She lives in Washington, DC.