Former Fed chief: Credit Crunch Not Going Away Soon

If after the lecture few felt more financially secure, the audience did gain a richer understanding of the forces that have created a slowdown in the American economy. The former Kellogg professor detailed the reasons for the downturn, focusing on the current credit crunch. He singled out failures related to subprime lending, including financial engineering practices such as securitization - chopping up and selling off risky loans to investors as mortgage-backed securities and collateralized debt obligations - calling it a "Major change" in banking and a relatively recent phenomenon dating back only two decades.