THE CONTINENTAL AFFAIR: The Rise and Fall of the Continental Illinois Bank by James P. McCollom

THE CONTINENTAL AFFAIR: The Rise and Fall of the Continental Illinois Bank

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KIRKUS REVIEW

An absorbing, elegaic appreciation of how Continental Illinois, Chicago's largest bank, came to be nationalized by the US government; from an insider who knew the institution when--and mourns its passing. McCollom spent 14 years with the Midwestern colossus, mainly in offshore postings. Although he left in 1980, while Continental was at the top of its multinational game, the author stayed in touch with former colleagues. His account sheds a good deal of new light on the events leading up to the bank's shocking fall from grace. To illustrate, McCollom traces in detail the ways in which a management reorganization adopted in 1977 at the behest of McKinsey & Co. contributed to the loss of upper-echelon control that permitted the 1982 Penn Square debacle. Weakened by this brush with disaster, Continental succumbed to a rumor-spurred run on deposits, which ended only with a megabuck bailout by the FDIC in 1984. McCollom documents how world-class banking's paramilitary bent can produce problems as well as solutions. Few if any major institutions, for example, realized that their corporate clients had become banks themselves during the 1970's. In addition to an unsparing critique of Continental and the helter-skelter international financial system within which it operated, the author has harsh words for journalists who became participants in as well as observers of the 1984 crisis. Whether Continental could have survived, let alone thrived, without confidence-impairing press reports on its solvency remains an open question McCollom does not address. He does, though, evoke the bygone esprit of the bank's officer corps and the intrinsic worth of business traditions that now seem relics of a simpler, slower-paced era with decidedly lower stakes. An affectionate, albeit analytic, memoir that conveys just how much was lost in the federal takeover and ongoing rehabilitation of Continental Illinois.

Pub Date: Oct. 1st, 1987
Publisher: Dodd, Mead