Despite the subtitle, Lords of Finance does not focus on the 1929 Crash or the Great Depression, but starts in 1914 and offers a financial history of the next twenty years, from a central bank perspective. Ahamed covers the financing of the First World War, the arguments over war reparations, the Weimar hyperinflation, the gold standard and its problems, the crash of 1929, bank panics and the Great Depression, and the responses to these by banks and governments.

Much of Lords of Finance is biographical. Four bankers are at its centre: Montagu Norman at the Bank of England, Hjalmar Schacht at the Currency Commission and then the Reichsbank, Benjamin Strong, at the Federal Reserve Bank of New York until his death in 1928, and Emile Moreau at the Banque de France. Maynard Keynes serves as something of a foil to those, and there are brief sketches of many other figures as well. This biographical material helps us understand the motivations of the key actors and their interactions, with one another and with their governments, but there is often more detail than seems helpful.

An epilogue compares the crises of 1929 to 1933 to various later financial crises. There's no attempt in Lords of Finance to present any macroeconomic theory, however, and Ahamed concludes with a non-explanation: "More than anything else, therefore, the Great Depression was caused by a failure of intellectual will, a lack of understanding about how the economy operated."

August 2010

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