The 2008 financial crisis began in the United States but impacted the global economy. Take a look at some of the principal players during the meltdown to find out how they fared in the years following the crisis. Review what these key players were doing as the financial markets succumbed to chaos and what they are doing now.
- Major government players in the 2008 financial crisis included Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and President George W. Bush.
- Corporate leaders during the crisis included the CEOs of financial institutions such as Morgan Stanley, Lehman Brothers, Goldman Sachs, and Bank of America.
- CEOs Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JP Morgan Chase retained their positions after the crisis.
- Bank of America CEO Ken Lewis is one of the few corporate leaders from the crisis who no longer works in the financial industry, after paying $10 million to the State of New York to settle an investigation.
- Time magazine named Kathleen Corbet, the president of S&P, one of the top 25 people to blame for the 2008 financial crisis.
Treasury Secretary Henry Paulson
During the last year of the Bush administration, Henry “Hank” Paulson had a significant impact on economic policy. He was CEO at Goldman Sachs before his stint at the Treasury Department, which started in 2006. One of his famous decisions as secretary was to let Lehman Brothers fail, precipitating a stock market drop of nearly five percent. In his zeal not to repeat that mistake, he helped push the bank bailout through Congress.
In 2010, Paulson published the book Brink, chronicling his experiences and observations during the financial crisis.
In 2011, Paulson founded the Paulson Institute, a center based at the University of Chicago that focuses on environmental and economic policies in the United States and China. He is the chair of the institute and co-chair of the Risky Business Project, which explores the economic impacts of climate change.
Paulson was featured in the 2018 HBO documentary Panic: The Untold Story of the Financial Crisis.
Federal Reserve Chair Ben Bernanke
At the helm of the country’s leading monetary policy-making body during the financial crisis, Bernanke was the face of quantitative easing. This policy involved reducing interest rates and injecting more money into the economy to encourage banks to lend and consumers to spend. While many politicians and economists were worried quantitative easing would spur inflation and new asset bubbles. Some economists, including Nobel Prize-winning economist Paul Krugman, laud Bernanke’s efforts and even insist that he helped rein in the crisis, preventing an even bigger financial catastrophe.
Bernanke was a member of the Federal Reserve Board of Governors from 2002-2005 and served as Fed chairman from 2006-2014 when he was succeeded by Janet Yellen.
Today, Bernanke is a distinguished fellow at the Brookings Institution and frequently blogs and gives analysis and commentary on economic policy. In 2015, Bernanke published a book, The Courage to Act, describing his experiences during the financial crisis. He became a member of the National Academy of Sciences in 2021.
Bernanke published another book in 2022, 21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19, detailing the monetary policy tools used by the Federal Reserve to keep the financial system from collapsing during the COVID-19 pandemic and its economic aftermath.
N.Y. Fed Chair Timothy Geithner
When Lehman collapsed, Geithner was in charge of the most powerful branch of the Federal Reserve. A few months later, he became Treasury Secretary under President Barack Obama. On one hand, Wall Street decried him as someone who over-regulated. On the other hand, progressive activists viewed him as a tool of the banks. During his time at Treasury, Geithner was also involved in controversy over his failure to fully report and pay income tax from 2001 to 2004. Geithner apologized for the mistake and paid the IRS his outstanding debt.
Now president of Warburg Pincus, a private equity firm that runs “loans by mail” outfit Mariner Finance that makes money from short-term, high-interest loans.
Since 2014, Geithner has been the managing director of the private equity firm Warburg Pincus. He occasionally lectures at Yale University’s school of management and chairs the advisory board f of the Yale Program on Financial Stability.
Geithner has published two books, Stress Test: Reflections on Financial Crises (2014) and Firefighting: The Financial Crisis (2019).
Lehman Brothers CEO Richard Fuld
As the last CEO of Lehman Brothers, Richard “Dick” Fuld’s name was synonymous with the financial crisis. He steered Lehman into subprime mortgages and made the investment bank one of the leaders in packaging the debt into bonds that were then sold to investors. While other banks were bailed out, Lehman was allowed to fail despite Fuld’s pleas to policymakers.
Fuld claims he never received a golden parachute at his exit from Lehman, but he did make more than $466 million during his tenure. Today, Fuld maintains a low-key public profile, but he is the head of Matrix Private Capital Group, a high-end wealth management firm he helped found in 2016. In 2022, Fuld joined Oasis Pro Markets as a strategic advisor.
Morgan Stanley CEO John Mack
After Lehman Brothers collapsed, Mack feared Morgan Stanley would be next, and he fought with Paulson, Bernanke, and Geithner to secure a bailout while trying to get financing from investors in Japan and China. In the end, he stood up to the policymakers, and Morgan Stanley was allowed to become a banking holding company, opening the way for increased liquidity and the opportunity to be part of the bailout.
Mack stepped down as CEO in 2010 and, in 2012, relinquished his position as chair of the board. Recently, Mack has been involved as a board member with fin-tech companies such as LendingClub and Lantern Credit, where he is chair of the board. He also serves as a senior advisor to the private equity firm KKR. In 2022, Mack published his memoirs, Up Close and All In, discussing his life and strategies as a top-level finance executive on Wall Street.
Goldman Sachs CEO Lloyd Blankfein
Another investment bank that participated in packaging toxic mortgage debt into securities, Goldman Sachs, led by Lloyd Blankfein, was allowed to convert to a banking holding company and received $10 billion in government funds, which it eventually repaid. In 2009, Blankfein even apologized for the firm’s role in the meltdown.
Blankfein is one of the few players in the crisis who retained his position. Blankfein served as CEO of Goldman from 2006-2018; in 2019, he became senior chairman of the board.
As of 2022, Blankfein owns an estimated 2,298,00 shares of Goldman Sachs, worth about 887 million dollars.
JPMorgan Chase CEO Jamie Dimon
Under the leadership of Dimon, JPMorgan bought Bear Stearns and Washington Mutual in an attempt to stem the rising tide of economic instability. JPMorgan Chase took millions from the Fed’s TARP program. However, in later years Dimon insisted that the company didn’t need it, and they only agreed to move forward under duress from policymakers.
Like Blankfein, Dimon has managed to hold onto the reins of his company. In fact, after dealing with legal issues arising from crisis-era purchases, JPMorgan is doing quite well. Dimon is still the CEO. In 2022, Dimon was awarded the Legion d’Honneur, the country’s highest merit award for expanding operations in France.
Bank of America CEO Ken Lewis
Shortly after claiming Bank of America wasn’t interested in major acquisitions, Lewis presided over its crisis-era takeovers of Countrywide Financial and Merrill Lynch. In the following months, Lewis was transformed from one of the saviors of the crisis—even receiving Banker of the Year in 2008—into one of its villains. Bank of America almost buckled under the weight of losses from the acquisitions, and Lewis himself was investigated for the methods used to gain approval for the Merrill Lynch deal.
Today, Lewis is largely out of the public eye. He agreed to pay $10 million to settle an investigation by the State of New York and even had to sell one of his multi-million dollar homes. However, Lewis still has enough left over to endow a chair at his alma mater, Georgia State University.
President of S&P Kathleen Corbet
While other rating agencies followed similar practices to Standard & Poor’s in the run-up to the crisis, Corbet was the most high-profile of the agency leaders. Time Magazine named her one of the top 25 people to blame for the financial crisis. Critics contend that Standard & Poor’s had a conflict of interest in taking payment from companies to rate the riskiness of their products.
Even though she left Standard & Poor’s in disgrace—and the company later had to pay a $1.5 billion fine to the U.S. government—Corbet has continued to serve on boards of various companies. Currently, she is the principal of Cross Ridge Capital, a firm she established in 2008, and a director of MassMutual. She also continues to consult in the fintech sector.
President George W. Bush
It’s debatable how much power a president has over the economy and the markets. However, the fact that Bush was president during the lead-up to the financial crisis and the Great Recession makes him a major player. The tax cuts and deficit spending favored by his administration didn’t help the country’s situation. There is a case to be made, though, that many of the economic problems leading to the financial crisis began during previous administrations, and former president Bill Clinton’s decision to sign a repeal of the Glass-Steagall legislation, which separated commercial and investment banking, also contributed.
Today, Bush keeps a low profile, mainly resurfacing for high-profile public events like Senator John McCain’s funeral. He spends much of his time at his home in Texas, refining his painting skills.
Did Anyone Go to Jail for the 2008 Financial Crisis?
Kareem Serageldin was the only banker in the United States who was sentenced to jail time for his role in the 2008 financial crisis. He was convicted of hiding losses by mismarking bond prices. Unlike previous financial scandals, such as the 1989 savings and loan crisis, the leaders of financial institutions in 2008 mostly avoided criminal charges.
Was Lehman Brothers Bailed Out?
Lehman Brothers was not bailed out. Regulators claimed that they were unable the bail out the company because it didn’t have enough collateral for a bailout loan. The company was forced to declare bankruptcy after its subprime mortgage portfolio was discovered to be worth far less than the company had claimed.
How Many Banks Failed in 2008?
From 2008 to 2010, more than 300 banks failed, compared to three banks from 2005 to 2007. Some of the largest banks to fail were investment banks, including Lehman Brothers and Bear Stearns. JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Bank of America were all bailed out by the federal government and did not fail.
The Bottom Line
Though the 2008 crisis impacted the entire global financial system, it was caused by the subprime mortgage crisis in the United States. As a result, many of its major players were U.S. government officials and corporate leaders of U.S. financial institutions.
Most of the government officials involved in managing the crisis have gone on to work in think tanks, publish books related to the crisis, or work in the financial sector. Many of the corporate leaders who helped cause the crisis still work in the financial industry, some of them at the same companies. One notable exception is Bank of America CEO Ken Lewis, who has been largely out of the public eye since settling an investigation by the State of New York for $10 million.