Long before 2008 and the financial crisis hit critical mass, there were warnings about the dangers of the risks being taken. Even as Wall Street attempted to decrease risk by trying new things, they only made things worse over time.
By 2008, the Big Five banks were in major trouble that in some cases could not be solved. Even as the financial institutions tried to find solutions to their issues, they could not successfully find investors or sales because there was no way to assign proper value to the different aspects of the financial companies.
Government intervention was required to save Wall Street and the financial system on a global scale. Not only did the government have to take over the mortgage companies Freddie Mac and Fannie Mae, but they also had to bailout the banking industry on the whole, which involved an infusion of cash in excess of $700 billion.
About the Author
Andrew Ross Sorkin is an American journalist and author. He works as the financial columnist for The New York Times and as co-anchor of CNBC’s Squawk Box. He founded Dealbox, a financial news service published by The New York Times. His book Too Big to Fail has been adapted as a Hollywood movie. He is the co-creator of the Showtime series Billions. He graduated with a Bachelor of Science from Cornell University.
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