McGeorge School of Law

Malloy Book Melts Away Financial Crisis Fog

July 27, 2010

Anatomy of a Meltdown

Anatomy of a Meltdown

A new book by Distinguished Professor and Scholar Michael Malloy, one of the foremost authorities on banking regulation, gives an insider's view of a crisis that nearly shattered the American financial system and continues to reverberate around the world.

Anatomy of a Meltdown from Aspen Publishers details the downfall of two well-known American corporations, investment giant Lehman Brothers and WaMu, the holding company for the Washington Mutual Bank. Both firms stumbled largely as a result of their connections with the subprime mortgage markets, though from opposite ends — WaMu in origination of mortgages and Lehman Brothers in investment in and distribution of derivative products.

Both firms went belly-up in September 2008, rocking world financial markets in the process. The collapse of Lehman Brothers was the largest bankruptcy in American history. WaMu's bankruptcy a week later represented the largest bank failure in U.S. history.

"The book tells that story and draws conclusions about the steps necessary to pull the financial system out of the current crisis — and to avoid the next one," Malloy said. "Since the Dodd-Frank Act signed earlier this month does not respond adequately or completely to the crisis, I think we're going to be talking about the issues raised in this book for some time."

Malloy, a former SEC enforcer who has taught at McGeorge since 1996, has authored or edited more than 100 books and book-length supplements in banking, corporate securities regulation and other areas of the law.

Anatomy of a Meltdown, a 304-page paperback, is available from Aspen and numerous on-line book sellers.