ROSALES, Ma. Andrea C.

Bachelor of Arts in Foreign Service 201

Introduction to International Trade
Mr. Jumel O. Estrañero

Too Big to Fail

I. BACKGROUND OF THE FILM

The movie “Too Big to Fail” (TBTF) was the first screen on HBO on 23 May 2011, based on
the novel Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save
the Financial System-and Themselves (2009) by Andrew Ross Sorkin’s non-fiction book. Curtis
Hanson directed the movie, it is a docudrama, this movie result of the catastrophic events of the
Wall Street 2008 financial crisis which, in addition to transforming the US economy irrevocably,
ruptures the global markets. The film depicts Ben Bernanke, the former chairman of the Federal
Reserve, and the work of Ben Bernanke in 2008 in the light of the financial crisis. The cast
includes the film nominations for a total of 11 Emmy Awards, including Tony Shalhoub, Topher
Grace, Paul Giamatti, James Woods, and Bill Pullman.

II. BODY
In the film, U.S Treasure Secretary, Henry Paulson that is attempting to fix one of the
economic issues in America. The film reveals that Henry Paulson was trying to save Lehman
Brothers from the brink of bankruptcy. But he could not save Lehman Brothers as he failed to
find any capital injection available for the Lehman Brothers.
The film began with the collapse of Bear Sterns that was purchased by J.P. Morgan Chase,
which cause the rise of a threat to the Lehman Brothers. Since the Lehman Brothers are under
pressure, they have tried to find some investment available for them to survive. Henry Paulson is
a concern when they fail to be obtained investment for the company.
Asides from Lehman Brothers, China has told Henry Paulson that they are prepared to spend
money in the mortgage industries. But they didn’t step into the offers. The Lehman Brothers
have not yet given up and tried to negotiate their company mergers with Bank of America. The
Bank of America merges with Merrill Lynch instead of making Lehman Brothers merge with
Bank of America (BoA), causing Dick Fuld (Lehman Brothers CEO) to become angry.
As the Lehman Brothers failed to merge with BoA, Henry Paulson assigns an emergency
meeting with all the CEOs to save the Lehman Brothers. During the meeting Henry Paulson told
them that it was their responsibility to save the Lehman Brothers, causing Barclay Banks to take
part to buy the stock. But unfortunately, Barclay’s British regulator didn’t approve the deal
causing Henry Paulson to out of option, which he asked the Lehman Brothers to go bankrupt.
The falls of Lehman Brother has caused other banks in the queue of bankruptcy, knowing this
problem: Timothy Geithner proposed the entire bank to merge with each other. Failed to merge
all the banks, Henry Paulson comes to the last option which was to get a bailout from Congress.
At first, he was rejected by Congress but in the end, his proposal was accepted by Congress. An
epilogue notes that bank mergers continued in the wake of the crisis and that now only ten
financial institutions hold 77% of all U.S. banking assets and have been declared too big to fail.

III. ANALYSIS
The film “Too Big to Fail” deals with the economic crisis in 2008, in which everyone can see
how those decisions influenced the individual in the economy of the U.S. There is an ethical
dilemma in the film, which was always there. Paulson wanted the problem to end, regardless of
what he had to do, even though he had passed over the law. In the film, Bear Stearns has already
passed, and the Lehman Brothers Company is their turn now.
Hank Paulson wanted to take action in the case of Bear Stearns to save the company through
the government, but this time Paulson did not want to do so because every CEO had to take over
their actions. Thus, he wants all to conduct themselves ethically in economic growth.
In the film, there is an issue between the Lehman Brothers and the Koreans, another problem
can be seen where Fuld did not want to sell the share to a low price, without thinking that he is
not the only one who will be affected personally, but the whole market. People must sacrifice in
this case. For the rest of the economy, Fuld didn't believe how severe the issue was for the rest of
the economy.
The situation had to be resolved by Henry Paulson and Ben Bernanke. With Bernanke,
Paulson agreed to go to Congress to request $700 billion for the U.S economic system in order to
save the economy. The Congress agreed that it was powerless and had to take other choices into
account. Paulson wanted to submit a bill that Congress approved. They were given the
opportunity to inject capital into the major U.S economic system institutions. The concept was
not endorsed by Paulson since he still fought against the government’s involvement in these
institutions as the CEO of Goldman Sachs. Paulson somehow directed financial institutions to
take the infusion of the capital to build customers’ trust and to save the economy of the U.S it is
in comparison to his personal beliefs.
In my view, this decision by the U.S Department of Treasury and the Federal Reserve was
the right one for the “Second Great Depression” if all the financial institutions collapsed.
Creating confidence in the consumers and investors was a challenge that they had to do to
unfreeze the market. In the long term, I assume the government will need to spend more money
on solving the problems. This crisis affects the whole world, and there are very many issues in
certain first world countries. Perhaps some emerging economies will see the world again and be
the world leader in the future. In this situation, I believe that Paulson and Bernanke have taken
reasonable action, even in contrast to the personal opinion of Paulson, and have thought about
the best option for a nation that could exposure to its entire economy. I agree that they decided to
act and save the economy that is why I think they too the appropriate actions.

IV. CONCLUSION
 The movie is very eye-opener and made me realize how challenging and complicated it was.
I was struck when Timothy Geithner told Henry Paulson about a call that was particularly
striking to me because he elaborated on how people were doing their business and how it falls
down. I very surprised that the actors in the film are really acted well because the film made me
feel intense and frustrating by watching the film. I felt the weight as well carried to the people’s
shoulders. I valued how they give power, dedication. and determination to solve the problem. For
his leadership, I admired Henry Paulson on how he shows strength and determination even
though he still receives criticisms of the actions he took at the time and the others did their best.
In the relations of international trading, the film shows the crisis of subprime mortgages or
junk mortgages. The financial system was caused to crash by these mortgages. Banks will lend
money to people with a high default rate, then they bought a house. The bank carried out the
mortgages knew that they would no comply and seized it. There were so many banks giving
loans and the price of houses began to fall, then the people left those houses to buy a similar one
at a lower price. In the end, the banks did not have liquidity, but they had real estate, so the credit
system was frozen, and the 2008 crisis began. It related to international trade because the film is
talking about debt, money, and the exchange of property.