Lessons from the Global Financial Meltdown of 2008

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.