The Senate Agriculture Committee held a hearing on the role of derivatives in the current financial crisis and regulatory issues pertaining to them. Testimony was delivered by Dr. William Black, Associate Professor at University of Missouri, Kansas City.
Black sites the perverse incentive structure in the primary and secondary housing market as the leading cause of the credit crisis. He proposes the following high-level solutions:
1) Increase information, transparency
2) Rebuilding trust with enhanced regulation
One of the more humorous moments of the hearing:
Black: “In Soccer, we would call this the greatest ‘own goal’ in history of the world. In terms of the deregulation”.
Senator Harkin: “Greatest what…what do you call it?”
Black: “Own goal, it’s a term when you score against yourself…Soccer’s our family passion, sorry”
Black also recently narrated the Keating 5 video released by the Obama campaign, which drew great attention on YouTube. This video has already seen more than 1.5 million views after being posted just last week: