The causes of the financial crisis of 2007-09 are many and varied. Indeed, the crisis may be viewed as the product of a perfect storm. Professor George Kaufman identifies the major culprits or sinners of the U.S. crisis and enumerates their more important sins. The culprits include central bankers, commercial bankers, credit rating agencies, financial engineers, the government, investors, mortgage borrowers, mortgage brokers, and prudential bank regulators. Among the numerous sins committed by these sinners, the poor performance of the government in encouraging risky home mortgages and the prudential regulators in inadequately enforcing the in-place rules are of particular interest. The regulators were poor agents for their healthy bank and taxpayer principals. It follows that prevention of future crisis requires the development of better incentives to motivate the regulators to be more faithful to the letter and spirit of the regulations.

George Kauffman is John F. Smith Professor of Finance and Economics and Director of the Center for Financial and Policy Studies in the School of Business Administration, Loyola University Chicago. He serves as a senior fellow for Networks Financial Institute at Indiana State University. Professor Kaufman’s teaching and research interests are in financial economics, institutions, markets and regulation and in the Federal Reserve and monetary policy.

This event is free, but reservations are required. Please reserve your spot by March 19th, 2010 with Marlene English at marlene.english@indstate.edu  or 812-237-2011.