Fault Lines / Raghuram G. Rajan wins Financial Times and Goldman Sachs Business Book of the Year Award
Raghuram G. Rajan today won the Financial Times and Goldman Sachs Business Book of the Year Award 2010 (www.ft.com/bookaward) for Fault Lines: How Hidden Fractures Still Threaten the World Economy, published by Princeton University Press, which analyses the flaws in the economy that lead to the current financial crisis, and warns of changes essential for economic recovery.
The Award was presented today at a dinner in New York by Lionel Barber, Editor, Financial Times, and Lloyd C. Blankfein, Chairman and Chief Executive Officer, Goldman Sachs. The keynote speaker was Vartan Gregorian, President of the Carnegie Corporation of New York.
Rajan saw off strong competition to win the £30,000 prize. The Award, which was established in 2005, aims to find the book that provides ‘the most compelling and enjoyable insight into modern business issues.’ Each of the five runners-up received a cheque for £10,000, an increase of £5,000 over previous years, and can expect heightened interest in their influential books.
Lionel Barber said of the winning title: “Fault Lines is a comprehensive analysis of what went wrong, but it is also only the beginning of the conversation. Rajan offers insights into how to correct the flaws in financial capitalism and illuminates difficult choices in public policy. It is a serious and sober book, but in these times sobriety is a virtue.”
“Raghuram Rajan has written a profound, compelling book,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer of The Goldman Sachs Group, Inc. “His analysis of what went wrong, and what needs to be done to address the structural flaws that caused the financial crisis, should be essential reading for policy makers and practitioners alike.”
The judging panel for the 2010 Award was:
Lionel Barber, Editor, Financial Times
Liaquat Ahamed, Author
Helen Alexander, President, CBI
Lynda Gratton, Professor of Management Practice, London Business School
Mario Monti, President, Bocconi University, Honorary President of Bruegel
Jorma Ollila, Chairman, Nokia; Chairman, Royal Dutch Shell plc
Shriti Vadera, Adviser to the G20 Presidency, Korea
Mr Gregorian said: “This is an era in which business and economics have taken center stage on both the national and international scene in ways that have substantially impacted the lives of men and women everywhere. But with courage, determination and conviction, the business press, along with journalists, authors and publishers across different media platforms have stepped up to the plate and made it a priority to better analyze and understand world markets and national business trends as well as to identify what’s gone wrong and what can – and must – be put right in terms of getting the nation’s financial house in order once again.”
Photographs of Raghuram Rajan and shortlisted authors, keynote speaker Vartan Gregorian, the judges and the award ceremony will be available to download from http://www.flickr.com/photos/financialtimes/ after 12 am EST on 27 October and upon request.
For further information please contact:
UK: Katrina Power/Steven Williams, Midas Public Relations
T: +44 (0) 207 361 7860, +44 (0) 79639 62538
Follow on Twitter @Bizbookaward
US: Angela Hayes, Goldberg McDuffie Communications
T: +1 212 446 5104
Darcy Keller, Financial Times
T: +1 212 641 6614
Ed Canaday, Goldman Sachs
T: +1 212 357 0005
The Financial Times & Goldman Sachs Business Book of the Year Award 2010
Fault Lines: How Hidden Fractures Still Threaten the World Economy
Raghuram G. Rajan (Princeton University Press)
Raghuram Rajan was one of the few economists who warned of the global financial crisis before it hit. Now, as the world struggles to recover, it’s tempting to blame what happened on just a few greedy bankers who took irrational risks and left the rest of us to foot the bill. In Fault Lines, Rajan argues that serious flaws in the economy are also to blame, and warns that a potentially more devastating crisis awaits us if they aren’t fixed.
Rajan shows how the individual choices that collectively brought about the economic meltdown – made by bankers, government officials, and ordinary homeowners – were rational responses to a flawed global financial order in which the incentives to take on risk are incredibly out of step with the dangers those risks pose. He traces the deepening fault lines in a world overly-dependent on the indebted American consumer to power global economic growth and stave off global downturns. He exposes a system where America’s growing inequality and thin social safety net create tremendous political pressure to encourage easy credit and keep job creation robust, no matter what the consequences to the economy’s long-term health; and where the US financial sector, with its skewed incentives, is the critical but unstable link between an over-stimulated America and an under-consuming world.
In Fault Lines, Rajan demonstrates how unequal access to education and health care in the United States puts the whole of the US in deeper financial peril, even as the economic choices of countries like Germany, Japan, and China place an undue burden on America to get its policies right. He outlines the hard choices we need to make to ensure a more stable world economy and restore lasting prosperity.
Raghuram G. Rajan is the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago’s Graduate School of Business.
Dr. Rajan is also currently an economic advisor to the Prime Minister of India. Prior to resuming teaching in 2007, Dr. Rajan was the Economic Counselor and Director of Research (in plain English, the Chief Economist) at the International Monetary Fund (from 2003). Since then, he has chaired the Indian government’s Committee on Financial Sector Reforms, which submitted its report in September 2008.
Dr. Rajan’s research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. His papers have been published in all the top economics and finance journals, and he has served on the editorial board of the American Economic Review and the Journal of Finance. He is co-author with Luigi Zingales of Saving Capitalism from the Capitalists.
Dr. Rajan is a senior advisor to Booz and Co, on the academic advisory board of Moodys, and on the international advisory board of Bank Itau-Unibanco. He is a director of the Chicago Council on Global Affairs and on the Comptroller General of the United State’s Advisory Council. Dr. Rajan is the President (elect) of the American Finance Association and a member of the American Academy of Arts and Sciences. In January 2003, the American Finance Association awarded Dr. Rajan the inaugural Fischer Black Prize, given every two years to the financial economist under age 40 who has made the most significant contribution to the theory and practice of finance.
The Art of Choosing
Sheena Iyengar (Little, Brown, Twelve/Hachette Group)
The Facebook Effect: The Inside Story of the Company That Is Connecting the World
David Kirkpatrick (Simon & Schuster)
The Big Short: Inside the Doomsday Machine
Michael Lewis (Allen Lane/Penguin Press UK, WW Norton & Co US)
More Money than God: Hedge Funds and the Making of a New Elite
Sebastian Mallaby (Bloomsbury, Penguin Press)
Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System – and Themselves
Andrew Ross Sorkin (Allen Lane/Penguin Press UK, Viking/Penguin US)
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