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Jean
Kouassi
Rick
Schott
Thomas
Toth
Katie
Dincolo
Kylie
Phillips
Nathan
Baughman
Was the Financial Industry
Responsible for the
Economic Meltdown of
2008?
Chelsea
Killingbeck
FINANCIAL
CRI$I$
GLOBAL FINANCIAL
CRISIS OF 2008
The
Invisible
Hand
YES – Utilitarian Approach
“The ends do not
justify the
means.”
Harm
Benefits
= IMBALANCE
Make
smart,
affordable
loans
Use
knowledge
to have
moral
impact
Protect
owner’s
interest
DUTY
to conduct
business in a
responsible way
regarding
stakeholders
YES – Rights Approach
Utilitarian Approach
“Aggressive
Homeownership
Goals”
NO
Unclear
Risk
Management
MOST
Loans
MOST
People
LOWEST
% Rate
NO – Rights Approach
Rating agencies
& regulators
failed to inform
Provided our clients
with financial advice &
information regarding
investment goals
Carried out duty to
maximize
shareholder wealth
To $um It Up…
“Yes” Argument “No” Argument
Responsibility
falls on…
Government SEC
Credit
Agencies &
Regulators
Financial
Industry at
fault
because…
Unbalance
Ends
didn’t
justify
means
Breached 3
core duties
Place blame by
degree of
responsibility
Economic recessions
are a natural
occurrence in any
economy
SOLUTIONS
INCOMING/
OUTGOING
PROPER
COMMUNICATION
FEDERAL
LEGISLATION
INTERNAL
ACCOUNTABILITY

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B399 presentation b