UMass Economics

Crotty claims profits high due to increased risk taking

James Crotty

James Crotty, UMass Amherst economics professor emeritus, says financial sector profits have been high in recent years because managers are taking more risks, but they aren’t always revealing that to the public.  In a 2007 paper, Crotty questioned whether financial investment strategies that were once considered too risky to adopt, but made safe (and profitable) by modern risk-management techniques would increase the likelihood of a future systemic financial crisis.  (Rortybomb, 4/19/10 and Financial Post, 4/21/10)