It was at this meeting that Dodd, who was in the room as the chair of the Senate Banking Committee, remembers Mr. Bernanke, a man usually as placid as the Federal Reserve's marble exterior, saying flatly: "Unless you act in a matter of days, the entire financial system of this country and a good part of the world will melt down."
A student of the Great Depression, Bernanke explained how such a collapse would affect the economy, from bankruptcy at firms like General Motors to soaring unemployment. The message for Congress was blunt: The Fed and Treasury could no longer prop up companies one by one. A more coordinated – and drastic – approach was needed. They needed a Congress-authorized rescue plan.
Eventually Congress did act, after an acrimonious debate, passing a rescue package that would allow the Treasury to inject billions into troubled firms. During these chaotic days, the full depth of the financial crisis began seeping out of the corridors of power in Washington and into the living rooms and corporate cubicles of America.
Today, five years later, the United States and other nations are still struggling with the task of recovering from the worst financial crisis since the 1930s – and formulating how to prevent a similar disaster from happening in the future.