A serious financial crisis in the U.S. and worldwide doesn’t mean business schools need to make any fundamental curricula changes, ASU professors said.

The unprecedented federal government intervention into U.S. financial markets, including injecting $700 billion to troubled assets, highlights a potential for the worst economic crisis since the Great Depression — and, while unlikely, maybe even worse, said Kent Hill, a professor of economics at the W. P. Carey School of Business.

But while some classes that deal specifically with the financial services industry and government regulation will see curricula changes, business educations by and large will not need any fundamental restructuring, he said.

Josef Brada, a professor of economics at the Carey School, said problems that worsened the credit crunch were built into the financial systems.

Business schools were not responsible for the whim of complicated markets that respond to complicated factors — including simple human psychology, he said.

“You don’t need to change the curriculum,” he said. “There’s nothing taught that was wrong.”

It would be a different case “if we were a medical school and we’d been sending out [doctors] who just killed 10,000 patients with stupid remedies,” Brada said.

Instead, the crisis is “really the result of objective circumstances in the credit market,” he said.

“Bankers had money to lend, and they had to lend it. They didn’t have any choice … they had to find borrowers in the U.S.,” he said.

After banks took out debt backed by mortgages, bad lending practices and the housing bubble played a role in collapsing the system, he said.

“This is a psychological phenomenon, when people believe that risk doesn’t apply to them,” he said. “It’s people’s mentality that causes this.”

Revamping a business education won’t change that, he said.
“We’ve had financial bubbles before, we’ll have financial bubbles again,” he said.

Professor Allan DeSerpa said U.S. government intervention in the economy was a root cause of the current economic crisis.

The fundamentals of economics and finance are still applicable, he said, and business education does not need to be adapted to the current economic problems.

“There’s no reason to change everything,” DeSerpa said. “The problems don’t lie in the financial markets themselves.”

Reach the reporter at matt.culbertson@asu.edu.