“If you follow the newspapers at all, you have a sense of how costly this period has been,” opened Dr. William Poole as he delivered a special lecture on “Improving Financial Stability” on Wednesday, October 8th in the Ruby R. Vale Moot Courtroom. A sizable audience turned out for the lecture, which was sponsored by Widener Law’s Institute of Delaware Corporate and Business Law.“Our fiscal policy is on an unsustainable course. How did this happen, and what can we do to stop it from happening again?” asked Poole rhetorically. He went on to discuss the roots of the financial crisis and indicated that the Federal government’s unwillingness to let some of the nation’s largest financial institutions fail will only cause those same institutions to try risky strategies again, calling the government bailout, “Insurance without charging an insurance premium.” Calling the financial collapse “not a failure of regulation, but rather a fundamental failure of economic analysis,” Poole described the origins of the crisis, sighting unchecked lending including subprime mortgages, and the trading of bundles of those mortgages as mortgage-backed securities. He traced the origins of the crisis to the early 1990s, and described the entire system as a house of cards built on the idea that real estate prices would continue to rise. He dryly concluded, “The music stopped and we started to get defaults.”Moving beyond the origins of the crisis to what he thought should be done, Dr. Poole said,  “We can’t have a system where losses are socialized and gains are privatized.” He suggested that creditors should be at risk in order to force them to have control over the situation. At the conclusion of the talk, he took questions from an interested audience.A native of Wilmington, Delaware, Dr. Poole graduated from Swarthmore College, and has both an MBA and Ph.D. from the University of Chicago. A former President of the Federal Reserve Bank of St. Louis, Dr. Poole was the Albert H. Goldberger Professor of Economics at Brown University, has served as a member of the Academic Advisory Panels of the Federal Reserve Banks of New York and Boston, and has served on the Congressional Budget Office Panel of Economic Advisors. He joined the University of Delaware faculty in fall 2008 as the Distinguished Scholar in Residence at the Alfred Lerner College of Business &amp; Economics.