Customer Reviews

The Death of the Banker: The Decline and Fall of the Great Financial Dynasties and the Triumph of the Small Investor (Vintage)

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Ron Chernow, who has degrees in English literature from Yale and Cambridge, has written excellent biographies of the Rockefeller, Morgan and Warburg families. In this book, which essentially is a spin-off of his other books, he explains how the economic niche that JP Morgan and the Warburgs inhabited, that of the middleman between the very wealthy and corporations and aspiring entrepreneurs, has disappeared in today's world of telephones, fax machines, the internet, the SEC, and mutual funds and venture capital.

This book grew out of a talk he delivered on the topic, with a brief summary of the Morgans and the Warburgs appended. Oftentimes talks given at conventions are in part written to fill time; this seems to be the case with this book; anyone with a bachelors in economics could summarize it on a page or two without any loss of meaningful detail, the second part is a short look at the lives of the subjects of his other books. Stylistically, the focus is on the use of elegant English, to such an extent that the book suffers under it. There certainly is a place for beautiful English in historical works, as anyone who has read Macaulay's History of England knows, but not as its own reward.

Those who want to familiarize themselves with the economic history of the great merchant bankers in an unthreatening way free of all too much economic jargon will greatly enjoy this book. PhD economists, on the other hand, will probably feel that Chernow ought to get to the point.

Death of the banker by Ron Chernow

Disappointing when you know the Warburgs, but anyway worthwile reading when it is read as intro to US Banking history. The book is an enlargement of a speech held by the author in earlier times. Thus, it centers in the first part strongly on the development and undevelopment of banking in USA. But reader beware, the title is misleading. Chernow really envisages the personal banker, the likes of Warburg or in particular J.P. Morgan and his power. So the power of banks has shifted, but will never expire as the author himself admits. The short stories of the lifes of the Warburgs and Morgan are nice first reading, but lack depth and analysis. Recommendation : If you lack time, read it, otherwise you are better off with the authors more precise works.

Dr. Rudolf C. King

CEO princeandprince.com

I was disappointed with Chernow's tome on the Morgans, partly because, as he states in this book, it lacked thematic content. I don't think Chernow is right about banking and finance generally becoming 'democratised', even if it is changing. Global finance is still controlled by a very few fund managers and bankers, albeit with an eye to the profit margin. It may be the populace's money, but they do not decide how it gets used, and this is the crucial power in our time. Nevertheless, this is a good introduction to the subject and always readable.

This book provides a fascinating overview of the evolution of banking from its origins as an offshoot of general merchandising to the complex subject it's become today. Chernow skillfully and entertainingly reveals how bankers have gone from being all powerful "Masters of the Universe" to much less exalted financial bureaucrats. Chernow could have gone further, though, and extrapolated to explain how this is the natural product of capitalism, where the only true "Masters" are the vast bulk of consumers.

While this book serves as a superb guide on the evolution of the Banking Industry over the past two centuries, it's strength is in its description of how bankers have been forced to change their focus towards individual investors and depositors over the last several decades.

Very well written!

As other reviewers have mentioned, the main part of this book is an essay about the historical transformation of finance, which is then illustrated by brief accounts of the Morgan and Warburg banking dynasties and collateral historical material. I did not read this when in came out in 1997, because I had read the longer Chernow works, including The House of Morgan and The Warburgs. I picked it up for a train ride the other day and was astounded at its prescience.

Chernow sketches the development of early finance arising naturally out of merchant activity and evolving into more specialized institutions subservient to users of capital (usually princes fighting wars). As finance globalized but information technology stagnated, bankers grew in power relative to their borrowers, reaching a peak around 1900. Changes in laws and information processing increased the stature of the great corporations, which evolved their own banking services just as early modern merchants had done 500 years earlier. Somewhat later, demographic and other changes empowered suppliers of capital. These two trends squeezed out the banker.

This is a simple story and even with elaboration makes a short book. What's astounding to me is how well this account explains the twelve years since it was published. It's hard to imagine how someone could see so clearly at a time when some of the most prestigious banks (including Goldman Sachs and Lazard Frères) were private partnerships, Glass-Steagall was in force and equity underwriting was the hot business. Chernow ignored all that, looking to a time when finance was dominated by diversified public companies, Glass-Steagall and banking regulation in general was irrelevant and underwriting and advisory work were minor side businesses to asset management and proprietary trading.

I suppose the moral is that a historical perspective is more valuable than detailed study of current events. In any case, I recommend this book both as a quick, pleasant read and a useful counterweight to books over-reacting to last month's events.

Chernow explains why the financial dynasties have receded to the status of historic dinosaurs--that is why they don't represent a permanent feature of economic life but a fleeting phase in the development of capitalist econimies.
Chernow takes the demise of the Rothschilds, Morgans, Barings, Warburgs as his starting point for a panoramic survey of the world of high finance during the past two centuries
For future historians, the salient fact of twentieth-century finance will be the financial intermidiary. Bankers are glorified go-betweens, conduits for capital flowds.
Ever since the Glass-Steagall Act of the 1930s, American finance has been partitioned into commercial banks, which take deposits and make loans, and investment banks, which issue, trade, and distribute securities. During the past generation, the small investor has evolved, in striking fashion, from a bit player and pariah to the mainstay of global financial markets. Hence Chernow's story originates in a vanished world of paunchy men with watch chains, striped pants, and thick cigars, and ends up with the modern mutual-fund boom.

Published in 1997, this book, marking the modern transformation of banking, is a small addition to the Ron Chernow continuum of great American historical writing about finance; Hamilton, Rockefeller, House of Morgan and the Warburgs.

What's next? I can not wait.

Brief, to the point and informative. A great anthology of how the financial world got from where it was to where it is now. Chernow is a master financial historian.