Summer 2009 a newsletter of the Department of Finance, Insurance and Law SUMMER 2008 Contacts Chair perspectives Department of Finance, Lessons for students of the financial crisis Insurance and Law chairperson Gary Koppenhaver Times are interesting for all students of the U.S. financial system. Since the spring (309) 438-8777 and fall of 2008, you get the sense that significant financial history is happening.
[email protected] What should our current finance, insurance and law students be taking away as events unfold? Are there Internship coordinators lessons that will help our students deal with present Kim Small for finance majors and future financial turmoil? (309) 438-2928 While debate continues on the causes of the
[email protected] financial crisis, a dynamic, changing society makes Debbie Babcock the causes of the crisis less important than the les- for insurance majors sons learned. I offer my observations on two things (309) 438-3368 that students of the financial crisis can learn from the
[email protected] extraordinary events of the past 18 months. Undergraduate academic advisor First, it seems clear that our system of financial Nancy Baldoni markets is not immune to behavioral “blind spots.” (309) 438-8385 These blind spots affect investors, financial advi- Gary Koppenhaver
[email protected] sors, corporate leaders, and regulators–sometimes simultaneously. The incorrect assessment and mismanagement of risk relative to Financial Management expected returns can be as catching as the flu; the crowd can be dangerous and Association faculty advisors dramatically wrong. Sensitivity to risk varies over time and participants can be Keldon Bauer caught in the illusions of liquidity and precise information.