The Financial Meltdown of 2008: The Perspective of Jewish Law
29 Pages Posted: 16 Jun 2009 Last revised: 7 Jul 2010
Date Written: June 14, 2009
One of the great ironies of the financial meltdown of 2008 – which was really more of a values meltdown – is that very few U.S. laws were actually broken. This paper investigates the financial crisis from a different legal perspective – that of Jewish law, using six framing principles: misleading with bad advice; deception and fraud; bribery, both outright and subtle; honest weights and measures; conflicts of interest; and transparency. Each of these is used as a lens through which to view the activities and behaviors that caused the current financial debacle and, in the process, almost totaled the global economy. The paper concludes that Jewish law was violated at every step of the way towards the current financial catastrophe. Had the bankers, auditors, rating agencies, politicians, regulators, and mortgage brokers followed the principles of business ethics described in Jewish law, the global financial crisis would not have occurred.
Keywords: financial crisis, mortgage brokers, business ethics, Jewish law, Talmud, conflict of interest
JEL Classification: A2, B1, B11, G1, G2, G21, G22, G23, G24, G28, G3, K2, M14
Suggested Citation: Suggested Citation