The lecture comprises 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.

Dale Henderson is a Visiting Professor of Economics at Georgetown University. He served in the International Finance Division at the Federal Reserve Board from 1971-84 and from 1989 to 2009, ending his career there as a senior adviser. In between he was a Professor at Georgetown University. He has taught at Yale University and the Universities of Pennsylvania and Virginia. He has published articles in leading scholarly journals on topics including the gold market, stabilisation policy, and foreign exchange intervention, and is the author of books on pollution control and monetary policy in open economies.