Six times a year, Basel, Switzerland, hosts what is arguably the planet’s most exclusive party, an intimate weekend gathering of the world’s most powerful central bankers to exchange ideas, eat and drink well, and revel in the company of the only people who can understand the unique burdens they share. Neil Irwin’s The Alchemists opens in Basel during the May 2010 meeting, with Europe in the throes of a particularly acute installment of its ongoing financial crisis, and each of our protagonists facing his own particular dilemma. For Jean-Claude Trichet of the European Central Bank, it is to try to save a currency union that he spent a lifetime building. For Mervyn King of the Bank of England, it is to navigate the rough waters of domestic British politics without walloping either his nation’s economy or his own credibility. For Ben Bernanke of the Federal Reserve, it is to try to keep the global economy afloat without making the Fed the target of Congress’s anger. It is just one more fiendishly tricky moment they have faced together since August 2007, when fissures in the system first became visible to the naked eye.
Irwin leaps back from 2010 to tell the full story of the last five years from the vantage of these three central bankers as they worked in close coordination to keep ahead of unfolding events. Irwin has spent years covering the world’s central banks and their leaders, and he enjoys a rare degree of intimacy with them and their challenges. From the beginning of the global financial crisis, he has been one of the few with the vision and the access to chronicle it as it truly is—an interconnected global phenomenon. Deftly woven throughout the book is an invaluable history of central banking, which provides essential context to the present-day story in the United States and abroad.
The Alchemists is the high-drama, panoramic story of the central bankers’ role in the world economy we have been missing, with the reach of a contemporary version of Liaquat Ahamed’s Lords of Finance. It is a landmark reckoning with central bankers and their power, with the great financial crisis of our time, and with the history of the relationship between capitalism and the state. Definitive, revelatory, and riveting, The Alchemists shows us where money comes from—and where it may well be going.