Credits

The global financial crisis that sent the world economies into a downward spiral has almost been forgotten in the wake of the recent A(H1N1) flu virus sweeping across the world.

However, rich learnings have come out of that crisis and lest we forget, read below for the most important lessons from the financial crisis highlighted by billionaire Warren Buffet and Charlie Munger.

Important Lessons From The Financial Crisis By Warren Buffet

• Companies should borrow less.
• Banks should be performance driven by having severe disincentives for failures and proper incentives for success.
• Intense regulation may not always help as Fannie Mae and Freddie Mac were heavily regulated before their collapse.
• There should be reforms in the accounting profession to avoid the wrong message of high profits presented before a company collapses.
• People should leverage less and own less debt – that includes your credit card and loans.
• People should educate themselves to avoid buying financial instruments they do not understand.

Will these lessons help prevent another financial crisis in the future? Its hard to say, as long as human beings continue to be greedy in their pursuit of money.