Borrowed Time: Two Centuries of Booms, Busts, and Bailouts at Citi

The alarming, untold story of Citigroup—one of the largest financial institutions in the world—from its founding in 1812 to its role in the 2008 financial crisis, and the many near-death experiences and government bailouts in between.

During the 2008 financial crisis, we were told that Citi was a victim of events beyond its control—the larger financial panic, unforeseen economic disruptions and a perfect storm of credit expansion and private greed. To save the economy and keep the bank afloat, the government provided huge infusions of cash through multiple bailouts that frustrated and angered the American public.

But, as Wall Street Journal writer James Freeman and financial expert Vern McKinley reveal in this gripping work of business history, the 2008 crisis was just one of many disasters Citi has experienced since its founding more than two hundred years ago. In Borrowed Time they reveal Citi’s disturbing history of instability and government support. It’s a story that neither Citi nor Washington wants told.

Citi has long been tied to the federal government in a relationship that has benefited both. From its earliest years, its well-connected leadership—most of its initial stockholders had owned stock in the Bank of the United States—took massive risks that led to crisis. But thanks to a rescue by private investors, including John Jacob Astor, the bank survived throughout the nineteenth century, long before the era of "too big to fail" bailouts.

This is just the tip of the iceberg. The scale of the financial panic of 2008 was hardly unprecedented. As Borrowed Time shows, crisis and outright disasters—and the moral hazard they create—have been surprisingly common during the century of government-protected banking—especially at Citi.

This meticulously researched work of financial history reveals the shocking pattern of risk and rescue that defines America’s most controversial bank:

• A Two-Hundred-Year History of Crises: Go beyond the 2008 financial crisis to uncover the bank’s many near-collapses, from the Panic of 1837 to the modern era, and the powerful figures like John Jacob Astor who intervened.
• The Wall Street and Washington Connection: Examine the secret history of the deals and relationships that have tied one of America’s largest financial institutions to the federal government for centuries.
• A Pattern of Financial Instability: Discover how Citigroup’s cycle of massive risk-taking and subsequent taxpayer-funded rescues became an unnerving feature of the American economy.
• Deeply Researched Economic History: Based on extensive archival research, this is the explosive story that neither the bank nor the government wants the public to know.

“This book convincingly shows—through fascinating investigative reporting of 200 years of history—how  connections between government and Citi grew closer over time and became the ultimate cause of bailouts, detested by so many Americans, and even of the market conditions that led to the financial crisis.” - John Taylor, Mary and Robert Raymond Professor of Economics, Stanford University

“This engagingly written book stands Wall Street conventional wisdom on its head. Rather than accepting the view that banks are inherently in need of regular government control and bailouts, the authors use a deep dive into the history of Citibank to argue the opposite. When Citi was managed under the discipline of market competition, before its behavior was distorted by government protection and control, it withstood severe macroeconomic shocks, and was a source of assistance for other banks and the government. With a series of examples tracing the highs and lows of risk management over two centuries, the authors show that Citi’s risk choices (including deciding who ran the bank) were often heavily and unfavorably influenced by government control and support.” - Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia Business School

“At the next banking crisis, Citi likely will be there, once again.  Borrowed Time explains why.” - Bartly Dzivi, Special Counsel, Financial Crisis Inquiry Commission

“Forget about whether Citigroup was ever too big to fail, all I know is this incredible book was too good to ever put down! Bank on it! Talk about a wild financial ride, and all on our dime. Because if James Freeman and Vern McKinley are right, the ride isn’t over, and neither are we! Read it with an open mind...and a closed wallet.” - Neil Cavuto, Anchor and Sr. Vice President, Fox News and Fox Business

“If you think the 200-year history of an American bank sounds dry, think again. Borrowed Time is a highly entertaining and informative run through a long list of the crises faced by Citibank.” - The Financial Times