The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sat, 18 Apr 2026 11:30:34 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Lessons of the Financial Crisis: The Dangers of Short-Termism – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Lessons of the Financial Crisis: The Dangers of Short-Termism https://corpgov.law.harvard.edu/2011/07/04/lessons-of-the-financial-crisis-the-dangers-of-short-termism/?utm_source=rss&utm_medium=rss&utm_campaign=lessons-of-the-financial-crisis-the-dangers-of-short-termism https://corpgov.law.harvard.edu/2011/07/04/lessons-of-the-financial-crisis-the-dangers-of-short-termism/#comments Mon, 04 Jul 2011 14:32:03 +0000 http://blogs.law.harvard.edu/corpgov/?p=19162?d=20110704103203EDT Editor’s Note: Sheila Bair is the Chairman of the Federal Deposit Insurance Corporation. This post is based on Chairman Bair’s remarks to the National Press Club, available here.

As I prepare to close out my term, I cannot help reflect on the challenges we have faced over the past five years and some of the lessons we have learned in the process. Our nation has suffered its most serious financial crisis and economic downturn since the Great Depression. The after effects will be felt for years to come.

There are many causes of this crisis, some of which I will address in my remarks today. But, in my opinion, the overarching lesson of the crisis is the pervasive short-term thinking that helped to bring it about. Short-termism is a serious and growing problem in both business and government. I would like to devote my remarks to explaining what I mean by this, and discussing how I think it plays into the policy challenges arising from the crisis.

The Challenge Posed by Short-Termism

What is short-termism, and why does it arise? Short-termism refers to the long-observed tendency – which we all share, to one degree or another – to unduly discount outcomes that occur far in the future.

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