The Global Financial Crisis of 2008: What Went Wrong?

36 Pages Posted: 10 Mar 2009 Last revised: 6 Aug 2010

See all articles by Hershey H. Friedman

Hershey H. Friedman

City University of New York - Department of Business Management

Linda Weiser Friedman

Baruch College, CUNY - Zicklin School of Business; CUNY - The Graduate Center

Date Written: March 9, 2009

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 in assets and millions of jobs. The authors present a set of lessons as teaching opportunities for today's students and tomorrow's decision makers.

[A modified version of this paper appeared as H.H. Friedman, L.W. Friedman, "Lessons from the Global Financial Meltdown of 2008," Journal of Financial Transformation, vol 28, 2010, pp.45-54.]

Keywords: business education, business ethics, financial meltdown, self-interest, toxic mortgages, credit default swaps, regulation, methods of compensation.

JEL Classification: A22, A23, G18, G21, G28, M14

Suggested Citation

Friedman, Hershey H. and Friedman, Linda Weiser, The Global Financial Crisis of 2008: What Went Wrong? (March 9, 2009). Available at SSRN: https://ssrn.com/abstract=1356193 or http://dx.doi.org/10.2139/ssrn.1356193

Hershey H. Friedman

City University of New York - Department of Business Management ( email )

Linda Weiser Friedman (Contact Author)

Baruch College, CUNY - Zicklin School of Business ( email )

17 Lexington Avenue
New York, NY 10010
United States

HOME PAGE: http://cisnet.baruch.cuny.edu/friedman/

CUNY - The Graduate Center

365 Fifth Avenue
New York,, NY 10016
United States

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