In Bankers' Trust, Aditi Sahasrabuddhe reveals a crucial element behind the resolution of global financial crises: trust between central bank leaders.

Central bank cooperation during global financial crises has been anything but consistent. While some crises are arrested with extensive cooperation, others are left to spiral. Going beyond explanations based on state power, interests, or resources, Sahasrabuddhe argues that central bank cooperation—or the lack thereof—often boils down to ties of trust, familiarity, and goodwill between bank leaders. These personal relations influence the likelihood of access to ad hoc, bilateral arrangements with more favorable terms.

Drawing on archival evidence and elite interviews, Sahasrabuddhe uncovers just how critical interpersonal trust between central bankers has been in managing global financial crises. She tracks the emergence of such relationships in the interwar 1920s, how they helped prop up the Bretton Woods system in the 1960s, and how they prevented the 2008 global financial crisis from turning into another Great Depression. When traditional signals of credibility fell short during these periods of crisis and uncertainty, established ties of trust between central bank leaders mediated risk calculations, alleviated concerns, and helped innovate less costly solutions.

Sahasrabuddhe challenges the idea that central banking is purely apolitical and technocratic. She pinpoints the unique transnational power central bank leaders hold as unelected figures who nonetheless play key roles in managing states' economies. By calling attention to the influence personal relationships can have on whether countries sink or swim during crises, Bankers' Trust asks us to reconsider the transparency and democratic accountability of global financial governance today.

Most accounts ascribe these episodes of central bank cooperation to geopolitical and national self-interest, but Sahasrabuddhe emphasizes the social relations of central bankers themselves. * Foreign Affairs *
Sahasrabuddhe emphasizes the social relations of central bankers themselves. Central bankers often have common social and educational backgrounds, and they attend the same international meetings. * Foreign Affairs *

Aditi Sahasrabuddhe is Assistant Professor of Political Science at Brown University. She specializes in international political economy with a focus on global governance, the politics of international finance, central banking, and economic history.