Uncontrolled Risk: Lessons of Lehman Brothers and How Systemic Risk Can Still Bring Down the World Financial System

  • 5h 9m
  • Mark T. Williams
  • McGraw-Hill
  • 2010

The risk taking behind Wall Street's largest bankruptcy . . .

In this dramatic and compelling account of Lehman Brothers’ spectacular rise and fall, author Mark T. Williams explains how uncontrolled risk toppled a 158-year-old institution—and what it says about Wall Street, Washington, D.C., and the world financial system. A former trading floor executive and Fed bank examiner, Williams sees Lehman’s 2008 collapse as a microcosm of the industry—a worst-case scenario of smart decisions, stupid mistakes, ignored warnings, and important lessons in money, power, and policy that affect us all. This book reveals:

  • The Congressional inquisition of disgraced CEO Dick Fuld: Did he really deserve it?
  • How the investment-banking money machine broke down: Can it be fixed?
  • The key drivers that caused the financial meltdown: Can lessons be learned from them?
  • The wild risk taking denounced by President Obama: Is Washington to blame, too?
  • The ongoing debate on reform and regulation: Can meaningful reform avert another financial catastrophe?

This fascinating account traces Lehman’s history from its humble beginnings in 1850 to its collapse in 2008. Lehman’s story exemplifies the ever changing trends in finance—from investment vehicles to federal policies—and exposes the danger and infectious nature of uncontrolled risk.

Drawing upon first-person interviews with risk management experts and former Lehman employees, Williams provides more than just a frontline report: it’s a call to action for Wall Street bankers, Washington policymakers, and U.S. citizens—a living lesson in risk management on which to build a stronger financial future. Williams provides a ten point plan to implement today—so another Lehman doesn’t collapse tomorrow.

About the Author

Mark T. Williams is a risk management practitioner and academic with two decades of experience. He has worked as a senior executive for major energy trading companies, a trust banker, and an examiner for the Federal Reserve Bank. Williams is currently on the finance and economics faculty at Boston University and serves as a senior advisor at the Brattle Group. He has been a guest columnist for Reuters.com, Forbes.com, and the Boston Globe.

In this Book

  • The Inquisition
  • From Humble Roots to Wall Street Contender
  • From Private to Public
  • History of Investment Banking
  • How the Investment Banking Money Machine Works
  • The Roller-Coaster 1980s
  • The 1990s: Rebuilding Years
  • Lehman’s Near-Death Experience
  • Innovation, Imitation, and Increased Risk
  • Lehman’s Risk Management
  • The Real Estate Bet and the Race to the Bottom
  • The Bear Mauling
  • Time Runs Out
  • The Death of Lehman, Regulation, and Investment Banking
  • The Enablers and the Deciders