The Financial Crisis: What Happened and Why?

The lecture comprised a description and an analysis of (some aspects of) the current financial crisis.  The crisis is viewed as a "financial perfect storm" resulting from a combination of developments in global markets for goods and financial assets.  Special attention is devoted to the incentives created by developments in financial markets in the United States and the United Kingdom.   A comparison of the experiences of these two countries is used in assessing the relative importance of the various changes in incentives.  At some points, comparisons with what happened in other countries help in isolating the key changes. This lecture was presented by the Centre for Applied Macroeconomic Analysis,  ANU College of Business and Economics, as part of the ANU Public Lecture Series 2009.