The global financial crisis reflects a failure of global economic governance. The failure of America's regulatory system has not only ramifications for the American economy, but for the global economy.
It is clear that the banks' risk management systems could not even protect their own shareholders, let alone the well-being of the global economy. What went wrong? Where did the global financial regulators fail? What can we do to minimize the downturn? And what, if anything, can we do to prevent a recurrence? What are the lessons for global governance in the 21st Century? Joseph E. Stiglitz is University Professor at Columbia University in New York and Chair of Columbia University's Committee on Global Thought. He is also the co-founder and Executive Director of the Initiative for Policy Dialogue at Columbia. In 2001, he was awarded the Nobel Prize in economics for his analyses of markets with asymmetric information. Stiglitz helped create a new branch of economics, "The Economics of Information," exploring the consequences of information asymmetries and pioneering such pivotal concepts as adverse selection and moral hazard, which have now become standard tools not only of theorists, but of policy analysts. His work has helped explain the circumstances in which markets do not work well, and how selective government intervention can improve their performance. Recognized around the world as a leading economic educator, he has written textbooks that have been translated into more than a dozen languages. He founded one of the leading economics journals, The Journal of Economic Perspectives. His book, Globalization and Its Discontents, (W.W. Norton June 2001) has been translated into 35 languages and has sold more than one million copies worldwide. Most recently, he has written The Three Trillion Dollar War: The True Cost of the Iraq Conflict with Linda J. Bilmes, published by WW Norton in March 2008.