1. The Financial Crisis: whodunnit? Howard Davies Director, LSE Reserve Bank of New Zealand Wellington 31 July 2009

3. Who is most to blame for the current financial crisis? % Source: Thisismoney.co.uk, June 2009

4. economists - “if anything needs fixing, it’s the sociology of the profession” – Dani Rodrik (Harvard) business schools – the Guardian testosterone – Scientific American “above-average testosterone levels may lead to irrational risk-taking”. video games – Professor Susan Greenfield of Oxford human greed – Rowan Williams Jews – 25% of Americans blame then (Boston Review survey) Some usual and unusual suspects

5. Global current account balances

6. Household debt as a proportion of GDP Source: FSA, ONS, Federal Reserve, Eurodata, Datastream

7. Bank Balance Sheets Large-cap banks’ aggregate assets rose to 43x tangible book equity Source: Silverlake, Capital IQ

8. Global Issuance of Structured Products Source: Silverlake, Lehman Brothers, April 2008

9. Latest GDP forecasts Source: IMF World Economic Outlook Database, April 2009

10. Source: The Economist, October 18 2007 Federal funds rate, actual and counterfactual, (in percent)

11. Resecuritisation SUPER SENIOR AAA AA A BBB Equity Capital Structure Containing Subprime Loans Subprime Mezzanine CDO Containing BBB Subprime Bonds 100% 28% 20% 11% 7% 0% 11% 7% 11% 8.6% 7% 100% 40% 0% CUMULATIVE LOSSES

12. Global Committee Structure – A Regulator’s View G-7 (Gov’ts) Financial Stability Forum WTO OECD (Gov’ts) FATF (Money Laundering) IASB (Accounting IASC Bank for International Settlements (Central Banks) G-10 (Central Banks) CGFS CPSS Basel (Banking) IOSCO (Securities) Joint Forum IAIS (Insurance ) Monitoring Group IAASB (Audit) PIOB IMF World Bank (Gov’ts) IFIAR (Audit) Source: Adapted with permission from Sloan and Fitzpatrick in Chapter 13, The Structure of International Market Regulation, in Financial Markets and Exchanges Law, Oxford University Press, March 2007

13. Happiness: comparing countries 30 35000300002000025000150001000050000 Income per head ($ per year) Average of % happy and % satisfied

14. The Financial Crisis: whodunnit? Howard Davies Director, LSE Reserve Bank of New Zealand Wellington 31 July 2009