None of this sounds like a warning — and indeed, Geithner’s main cautionary message seemed to be directed not so much at the bankers as at their regulators, including at the NY Fed. Between the beginning of his speech and the end, moreover, Geithner said a lot of things which, let’s say, don’t really withstand the test of time. He said that there were four big “changes in the nature of financial intermediation” which had “played a role in improving the overall resilience and performance of the U.S. financial system”; he was effectively saying “you’ve done these four things, which is great, can we have more like this please”. What were those four things?

The first: “Innovation in financial technology continues to expand the opportunities for financial institutions to separate and distribute, and to manage and hedge, different types of risk.” Or, to put it another way, “yay derivatives! Please use lots more derivatives!”

[...]

There are two big worrying things here. The first is that Geithner didn’t see the crisis coming at all, and indeed was something of a cheerleader for all of the dangerous activities that the banks were getting up to. The second, which is just as bad, is that with hindsight, Geithner sees this speech as being prescient and heroic — that it’s something to be proud of, rather than sheepishly ashamed of.

As I read the rest of Geithner’s book, then, I’m basically forced to treat the author as an unreliable narrator. Geithner might seem to be straight-up and guileless, but his report of this speech shows that he can remember things — even things which are easily found on the internet — in an extremely self-serving manner. Maybe that’s only to be expected, from a political memoir. But it’s disappointing, all the same.