Overview
W1 Considering the Financial Crisis of 2008 –
The Financial Crisis of 2008 was the worst global financial meltdown since the Great Depression. In the ensuing decade there was a near continuous discussion of the causes and the solutions. Did this crisis demonstrate a need for more regulation, different regulation, or something else? Does government intervention in financial markets simply make things worse? The argument breaks down along fairly traditional ideological lines with progressives and liberals on one side and conservatives on the other, but the answers may be more complicated.
To prepare for our discussion, please:
- Read The Financial Crisis of 2008 from our Coursepack
- Listen to the Harvard Business podcast, Why Finance Needs More Humanity and Why Humanity Needs More FinanceLinks to an external site.
- Read 2008 Financial CrisisLinks to an external site. from The Balance
- Read: U.S. News: Bernanke: 2008 Crisis Worse Than DepressionLinks to an external site. from the Wall Street Journal
Then using what you have learned from the resources and from this week's lessons, answer the following questions:
A major driver of the financial crisis of 2008 was the poor quality of the mortgages that backed many investments made by the banks. Those mortgages had been taken out by people who could not afford the payments or committed verifiable fraud on their applications.
- Considering the concepts of optionality, commitment and obligation discussed in the article/podcast “Why Finance Needs More Humanity and Humanity Needs More Finance”, why did the financial crisis occur?
- What were the human factors at play? What human failures occurred?
- Economic conditions deteriorated during the COVID pandemic, but a global financial meltdown was avoided. Did the recovery from 2008 establish guardrails and safety valves that prevented a global economic meltdown?
Assignment - Birla 3M Limited
This assignment allows you to refresh your skills in preparing and analyzing financial statements.
The Birla 3M Limited case deals with the concepts relating to the finalization of accounts using basic data on transactions. It is expected that the income statement, balance sheet, and adjusting will be passed with the help of information given within the case. To view the case, use the link to the Harvard Coursepack.
Please review the details of the case and, following the instructions contained in the case, submit Excel spreadsheets for the following:
- Prepare an Income Statement for the year ended December 31, 2000.
- Prepare a Balance Sheet as of December 31, 2000.
- Prepare ledger accounts to show calculations not shown on the income statement.