Lessons Learned from the Financial Crisis: Responses to the Pre-Event Survey

September 11, 2011

At the St. Louis Fed's inaugural Dialogue with the Fed event, Julie Stackhouse revealed the results of a pre-event survey that gauged attendees' impressions of current economic conditions, and the efficacy of financial regulatory reform.

Transcript:

Julie Stackhouse: I wanted to show you what you had to say in the pre-event poll questions. So when you registered you were invited to answer some questions. And here's what you had to say.

This one actually surprised me a little bit. We asked you really since—we did pick a date, June of 2009, have your economic circumstances changed? And sometimes we do tend to focus on all the challenges, and it's appropriate to focus on those challenges. There are many. Particularly, as individuals struggle with situations like long-term unemployment, issues in housing. In fact, many of the issues we'll talk about tonight.

But interestingly, over a third indicated that their conditions have remained the same. And in some cases they have improved. So we like to see that news too, as well as know that we have to deal with the challenges.

The second question talked a little bit about some sweeping legislation that was introduced. I know there's one individual here. We talked earlier about the Dodd Frank Act. And what the Dodd Frank Act meant for the financial system. It was huge. It was a massive piece of legislation and we're only now beginning to implement all the regulations that come along with it. And so the question was, will this lessen the impact of future financial shocks? What do you think about that? And, you know, there's a bit of skepticism out there. (Laughter) Which is a good St. Louis way to approach things, right? Certainly some people are more confident, but most want to see a little bit more on this to know if in fact the legislation has the intended effects, and if too big to fail has been conquered. So we're probably going to need more time to know that for sure.

Okay. And then the financial crisis, what was the cause of the financial crisis? We actually lifted some reasons on a report that was put together following the crisis by a commission that was established. And these were some of the reasons that they cited. We wanted to see what you thought was the primary reason. And here I think it was pretty evident that most of you chose the issue of the mortgage market and the securitization of the risk. If you have no clue what I'm talking about, we’ll refer to that in a little bit.

And then importantly, the losses that have ensued. So, again, that was pretty much what you had to say in that regard.

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