Roy Smith was an investment banker at Goldman Sachs for twenty years, and is also the author of books such as Global Banking, The Money Wars: The Rise & Fall of the Great Buyout Boom of the 1980s, Street Smarts: Linking Professional Conduct With Shareholder Value in the Securities Industry, etc. He wrote in the Introduction to this 2009 book, "The story of the transition of this industry from there to here is an extraordinary one... Many of these leaders made contributions that shaped the future of their firms for many years to come. Their stories make up much of the fabric of this book, which on the whole is aimed at providing a wide-angle historical look at the capital markets industry as it traveled from where it was back in the 1960s to where it is today." (Pg. 6)
He notes, "the Justice Department opened a criminal investigation to determine whether [CEO Richard] Fuld or others at Lehman had committed fraud in their statements as to the health and viability of the firm, and whether Lehman needed more capital when it said it didn't, during its last months of duress. Many Wall Street bankers would be unable to deny a certain amount of sympathy for Fuld, thinking how easily they, too, could have ended up in his shoes, had circumstances and timing been a little different." (Pg. 25)
He criticizes former Treasury secretary Henry Paulson's actions during the crisis: "Offended by the moral hazard of bailouts, he wanted to draw a line at Lehman, and did. He and [Fed chair Ben] Bernanke claim they had no authority to guarantee Lehman's assets, even briefly--but who was checking? Paulson's flip-flopping on TARP also came in for criticism. First he asked for $700 billion to stabilize the collapsing asset-based securities markets... Then he switched the strategy in favor of partially nationalizing the larger banks in the country, then suggested that having used about half of the fund, he was finished and would let the incoming administration decide what to do next... Finally, choosing to support the so-called healthy banks by large injections of government-owned capital may not have been the best way to aid them... Maybe it would have been better after all to have helped the distressed banks get rid of the troubled assets by forcing their sale to TARP." (Pg. 41-42)
He observes, "Certainly in retrospect it is obvious that no one was watching Merrill's trillion-dollar balance sheet and worrying about the increasing mortgage-exposures that were occurring while the market was softening." (Pg. 345) He suggests, "Citigroup had become something of a zombie, unable to get itself into a profitable mode, staggered by the weight of troubled assets that it had been unable or unwilling to sell, and stuffed to the gills with government capital that it is supposed to repay within a few years... The government's role, originally described as passive, was proving to be anything but." (Pg. 373)
He also argues, "Many Americans ... were convinced that any bonuses at all for top executives of Wall Street firms would constitute 'excess compensation.' But none actually got any: no Wall Street CEO taking TARP money received a bonus in 2008, and the same was true for most of their senior colleagues. Not only did those responsible receive no bonuses, but the value of the stock in their companies ... dropped by 70 percent or more, leaving them, collectively, with billions of dollars of unrealized losses. That's pay for performance, isn't it?" (Pg. 376)
Smith's apologetical defense of Wall Street is a rather unusual one among books on the crisis, but it is very much worth reading, to get a full picture of the 2007-2009 crisis.