Lessons from the Global Financial Meltdown of 2008

Hershey Friedman and Linda Friedman

Journal of Financial Transformation, 2010, vol. 28, 45-54

Abstract: The current financial crisis that threatens the entire world has created an ideal opportunity for educators. A number of important lessons can be learned from this financial meltdown. Some are technical and deal with the value of mathematical models and measuring risk. The most important lesson, however, is that unethical behavior has many consequences. This debacle could not have occurred if the parties involved had been socially responsible and not motivated by greed. Conflicts of interest and the way CEOs are compensated are at the heart of this financial catastrophe that has wiped out trillions of dollars in assets and millions of jobs. We present a set of lessons as teaching opportunities for today’s students and tomorrow’s decision makers.

Keywords: business education; business ethics; self interest; toxic mortgages; credit default swaps; regulation; methods of compensation; mathematical models in finance (search for similar items in EconPapers)
JEL-codes: A22 A23 G01 G18 G21 G28 M14 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1415

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