Raghuram Rajan collected the £30,000 prize for Fault Lines in New York on Wednesday.

The book identifies the flaws that helped cripple the world financial system, prescribes potential remedies, but also warns that unless policymakers push through painful reforms, the world could be plunged into renewed turmoil.

Lionel Barber, FT editor and chair of the judging panel, praised Fault Lines as a “serious and sober book” for a time when “sobriety is a virtue”.

The book, published by Princeton University Press, saw off stiff competition from five others on the shortlist, to be chosen as “the most compelling and enjoyable” business title of 2010. The final intense debate among the seven judges came down to a choice between Fault Lines and Too Big to Fail, Andrew Ross Sorkin’s acclaimed minute-by-minute analysis of the collapse of Lehman Brothers.

Prof Rajan was the International Monetary Fund’s chief economist when he warned the 2005 Jackson Hole conference of central bankers that the seeds of disaster were being sown in the financial sector. His presentation jarred with the self-congratulatory tone of the conference, Alan Greenspan’s last as chairman of the US Federal Reserve. Prof Rajan writes in the book that the critical reaction from other participants made him feel “like an early Christian who had wandered into a convention of half-starved lions”. But within three years, his analysis had been vindicated. Read more

The optimistic doomsayer	Interview with the winner
Prof Rajan talked to Andrew Hill about the book, the influence of the “Chicago school” of economics and his hopes and fears for the future of the global economy.	Raghuram Rajan tells Andrew Hill about the causes of the downturn – and how to fix them Read the edited transcript