Elizabeth McCaul served as New York State's Superintendent of Banks from 2000 to 2003 and Acting Superintendent from 1997-2000. Most recently, she was a member of the European Central Bank's supervisory board.
I was in Japan when the first reports came in. My immediate reaction was horror — and frustration at being so far from New York, where many institutions I supervised were suddenly at the center of an unfolding crisis.
Then it became clear that being overseas gave me one unexpected advantage: I had a working telephone. Communications in New York and Washington were badly disrupted, but from Japan I could still reach people. I began staying in touch with banks, regulators and state officials, passing along information and helping work through problems emerging in the financial system.
For three days, my hotel room became an improvised communications center. Post-it notes with phone numbers covered the mirror, and the hotel brought extra phones into the room. I barely slept.
Back in New York, my first deputy operated first from our headquarters at Two Rector Street, only blocks from the World Trade Center, and then from the Federal Reserve Bank of New York. We spoke constantly.
The first priority, of course, was people. After that, every operational question came back to one thing: could we keep the banking system functioning well enough to preserve confidence? Could people get their money? Could payments clear? Could banks operate? Could the financial markets reopen?
Cash was an immediate test. People were withdrawing money, ATMs were running low, and closed bridges and tunnels made normal deliveries extraordinarily difficult. The Federal Reserve had cash available in New Jersey, but getting it into the city required coordination. I was in contact with Governor George Pataki's office as officials worked through how to move cash, equipment and people into lower Manhattan.
Payments were another critical pressure point. Transactions that normally moved routinely through the settlement system were backing up and had to be reconciled. Our examiners normally tested whether institutions were complying with supervisory requirements; that week, we sent them into operating centers to help reconcile the books.
It was a simple judgment: this was not the moment to examine the system. It was the moment to help unclog it.
None of us were operating alone. The Federal Reserve, Treasury Department, regulators, banks, law enforcement and state officials were solving problems minute by minute. Our job was to use whatever authority and expertise we had to help the system function.
We also had employees to worry about. Some Banking Department examiners had been in or near the World Trade Center. It took days to account for everyone, and some never returned to work after what they experienced.
My daughter Carole was with me, having come along for the chance to see more of the world before entering Dartmouth later that month. We did not know when we would be able to leave Japan. We were hardly alone: members of a Treasury Department delegation, Federal Reserve Governor Laurence Meyer and other U.S. officials were stranded there as well.
Eventually, the military arranged a flight home for all of us. When we left the hotel for the air base, I stepped outside after days spent almost entirely on the telephone and saw something I have never forgotten: a line of Japanese people near the American Embassy, many carrying white flowers in tribute to those who had died.
We boarded a C-5 military transport, strapped into jump seats with ear protection against the roar. It was loud and uncomfortable — and I was grateful for every mile that brought me closer to New York.
When I returned, I headed into the city. Below the checkpoints, lower Manhattan looked and felt like another world. I walked through ash and debris to Two Rector Street and retrieved a computer and essential papers because we would have to operate somewhere else.
Then I went to see Bill McDonough, president of the New York Fed. There was someone I had been asking about from the moment the attacks occurred: Neil Levin. I had served under Neil at the Banking Department and succeeded him as superintendent. He had been one of the great mentors of my career. By September 2001, he was executive director of the Port Authority of New York and New Jersey. For days I had been holding onto hope.
Bill told me Neil had died in the World Trade Center.
Amid human tragedy, the financial system recovered. The markets reopened the following Monday. Cash reached the banks. Institutions operated from backup sites. Thousands of people across government and the private sector helped make that happen.
Looking back, what strikes me is how quickly things we took for granted became uncertain. Of course communications connected people, payments cleared and backup facilities were there if needed. Suddenly, none of that could be assumed.
Years later, a senior banking executive reminded me that I had called her from Japan to ask how her institution was functioning. She also put one lesson of September 11 simply: some banks learned that a backup site half a mile away did not really count as backup.
That experience changed how banks thought about resilience. It was not enough to have another facility. Could people reach it? Were critical operations geographically concentrated? Would communications and backup plans actually work under stress?
The attacks also changed the supervisory agenda almost overnight. We urgently sought to understand how the attackers had been financed as we did not know whether further attacks were imminent. Banks, regulators, and law enforcement began working together at once to strengthen our ability to keep the financial system from being used by terrorists. That remarkable cooperation soon included the Intercept Forum organized to identify and disrupt the flow of funds to terrorists where I represented New York.
What I remember most personally 25 years later is the human toll. In the months that followed, I spoke at dozens of funerals for firefighters, police officers and others who had died.
Neil's loss was especially personal. He taught me an enormous amount about public service and leadership, and when my younger daughter was born in 2003, I wanted to honor him. In my maternal line, generations of daughters were named Elizabeth with no middle name. We broke that tradition by naming her Elizabeth Nell, the Gaelic female version of Neil, honoring Jewish custom; like the generations before her, she added Mary at confirmation.
September 11 taught all of us in banking lasting lessons about resilience. Systems, contingency plans, communications, liquidity and operational readiness matter enormously. But institutions ultimately depend on people. That is what I remember.
