Reviewing the economic crises ever happened in history, say the recent US sub-prime mortgage or EU debt crises, most of them originated from greed and lies.
Greed is so ingrained in human nature and probably we have no way to eradicate it. On another hand, we can debunk lies if people are more knowledgeable and information is more transparent.
US sub-prime mortgage crisis originated from a lie that the finanical industry can control the risk of the high risk sub-prime mortgage market by using financial derivatives e.g Credit Default Swap.
EU debt crisis originated from a lie that many EU countries monkey about their debt figures in order to reap the benefit of joining Euro.
To avoid these kinds of crises, transparency and freedom of press are what we need and that’s why I advocate the Business Ethics adopted by Warren Buffet – Newspaper Test.
All my decisions and speeches including private conversation were made as if there was a hostile newspaper reporter standing next to me. I simply don’t have any personal decisions or speeches that I don’t want to be reported by anybody.
If everybody can adopt this strict standard of Business Ethics, most crises will not happen at all.