It is time to admit that I once deliberately withheld important information from readers. It was 10 years ago, the financial crisis was at its worst, and I think I did the right thing. But a decade on from the 2008 crisis (our front pages from the period are at ft.com/financialcrisis), I need to discuss it.
The moment came on September 17, two days after Lehman declared bankruptcy. That Wednesday was — for me — the scariest day of the crisis, when world finance came closest to all-out collapse. But I did not write as much in the FT.
Two critical news items had broken on Tuesday night. First, AIG received an $8.5bn bailout. It needed it because it had to pay up for credit default swap transactions it had guaranteed. Without those guarantees, bonds sitting on banks’ balance sheets and assumed to be of no risk would instead be deemed worthless. That would instantly render many of the banks holding them technically insolvent. A failure of AIG, many believed, would mean an instantaneous collapse of the European banking system, which held much impaired US credit.