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Does the world need a financial Manhattan Project?

Article Excerpt
Excerpt from The Lords of Finance: The Bankers Who Broke the World, by Liaquat Ahamed (Penguin Press, 2009).

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In the early 1940s, the world's best scientific minds took on the challenge of preempting Adolf Hitler 's plans for a nuclear weapon. In a parallel sense, do the world's best financial minds need collectively to assemble to find some global independent means of unraveling today's securitized asset markets and related derivatives products which have paralyzed world credit markets ?

In his new book, Liaquat Ahamed describes a similar exercise in 1912--a coming together of premier experts--which led to the formation of the Federal Reserve.

--D. Smick

The 1907 panic exposed how fragile and vulnerable was the country's banking system. Though the panic had finally been contained by decisive action on [J. Pierpont] Morgan s part, the panic became clear that the United States could not afford to keep relying on one man to guarantee its stability, especially since that man was now seventy years old, semiretired, and focused primarily on amassing an unsurpassed art collection and yachting to more congenial climes with his bevy of middle-aged mistresses.

Shaken by the crisis, the U.S. Congress decided to act. In 1908, it created the National Monetary Commission, consisting of nine senators and nine...