The financial crisis of 2008 is a looming figure in current economic thinking. The global economy is still slowly recovering from the shock, and policymakers and academics continue to discuss the structural changes needed to prevent a recurrence. The stress of the last half decade has made two things very clear: A productive and innovative financial system is essential to the broader economy, but financial innovations made irresponsibly—without consideration of systemic risk and other impacts on society—can wreak havoc.
Was the 2008 financial crisis a one-time event or the first example of a new pattern? Professor Gary Gorton argues that the history of banking shows that there’s a real risk of future upheaval in financial markets.
The investment banking industry has been subject to new scrutiny, increased regulation, and changing capital requirements since the financial crisis of 2008. How much has this changed what bankers do? Yale Insights spoke with industry veteran Fred Terrell '82.
John Shrewsberry, the president of Wells Fargo Securities, outlines how government regulation and the ongoing tight credit environment are affecting the banking industry—and how big banks can keep up with the rapid pace of change today.
New research is debunking myths about microfinance and showing how organizations can effectively address problems associated with poverty. Yale faculty Dean Karlan, Tony Sheldon, and Rodrigo Canales discuss the problems and the promise in the field of microfinance and the lessons for other kinds of social enterprise.
Shareholders own the corporation, so managers should maximize returns for shareholders, right? Corporate law expert Lynn Stout says that there are problems with this argument, starting with the fact that legally shareholders don't own a corporation. On top of that, she says, prioritization of shareholder value harms returns in the long run.
Finance plays a critical role in supporting energy, water, and infrastructure projects, but private markets allocate capital within a framework set by governments. What sorts of policy or market changes could have the greatest impact on financing sustainable development? The Yale SOM Office of Alumni Relations and Qn magazine hosted a discussion on October 6, 2010, with two SOM alumni and a faculty moderator.
Yale SOM finance professors Frank Fabozzi, Gary Gorton, and Will Goetzmann discuss what caused the financial crisis, what we have learned since then, likely impacts of the financial reform legislation, and proposals to address unresolved issues in the housing and securitization markets.