Five best: books on financial meltdowns

For the Wall Street Journal, Martin Mayer, a guest scholar in economic studies at the Brookings Institution and the author of many books about banking and finance, named a five best list of book on financial meltdowns.

One title on his list:

Bailout
by Irvine H. Sprague
Basic Books, 1986

"Bailout" is a superbly honest first-person account of the big bank traumas of the 1980s, written by a long-term director of the Federal Deposit Insurance Corp. Irvine H. Sprague lived through it all -- the collapse of Commonwealth Bank of Detroit, First Pennsylvania of Philadelphia, Penn Square of Oklahoma City, Seafirst of Seattle, Continental of Chicago. He responded by closing some banks, sustaining some and arranging the acquisition of others. Sprague knows all the theories, but they are not his business here; he has some stories to tell. And judgments to make: "In First Pennsylvania we put money in the bank and saved the holding company. In Continental we put money in the holding company and saved the bank. Either way, the stockholders received an outright gift from FDIC." He wrote the book, he says, to show how banking regulators make decisions, and after reading "Bailout" we do in fact know more about how the sausage got to be sausage. He leaves us with a question: "Should megabanks continue to receive favored treatment?" The past few weeks have found the wrong answer to that one.

Read about Number One on Mayer's list.

Related: Critic's chart: books on cash crashes.

--Marshal Zeringue