At Cornell University's Johnson School, finance professor Andrew Karolyi strikes a similar note. He'll remind students that real-world events don't always play out the way a model indicates. "Our models and our perceptions of financial systems are more fragile than we realize," he says.

In a managerial finance class that Prof. Karolyi is teaching this fall to executive MBA students, he'll put more emphasis on hot-button crisis issues, such as liquidity in pricing securities, which came under scrutiny this past fall when it became almost impossible to determine values for certain complex financial instruments.

He'll also have students look more closely at conflicts of interest among a firm's stakeholders, like between executives and shareholders--a hot topic in regulating executive pay.

At UCLA, Prof. Gabriel is using real-world examples to help students test and understand theories. He plans to use a new case study on the subprime meltdown. For the midterm and final, students will have to show they've learned to question accepted models, which he says will help them notice signs that might point to future market collapses.

Other professors will push students to better understand complicated financial products. Reena Aggarwal will encourage students in her class on alternative investments at Georgetown University's McDonough School of Business to discuss ways to make those markets more transparent.
Ahead of the crisis, she notes, markets for complex instruments such as credit-default swaps had ballooned. When the market plunged, investors realized the difficulty in putting a value on those products.

"It becomes extremely important to discuss these issues --more than in the past--because of events like the failure of AIG," whose problems stemmed in large part from its sale of credit-default swaps, she says.

For Mark Zupan, dean of University of Rochester's Simon Graduate School of Business, the crisis provides a vivid lesson on "agency theory," the notion that people make weaker choices when they have little or no "skin in the game," he says.

Home "flippers" who counted on rising real-estate prices and easy credit to make their investments pay off, for instance, often chose to take out risky mortgages with little or no down payment that they later found they couldn't afford. Mr. Zupan expects faculty to mine the crisis for examples that illustrate those dangers in order to teach students.

Some programs are boosting ethics and leadership courses.

Thunderbird School of Global Management in Glendale, Arizona, will double the length to six weeks of a required course on corporate governance, ethics and entrepreneurship. Provost Robert Widing says the crisis exposed leaders' shortcomings. "The roots were in greed and incompetence," he says.

University of North Carolina's Kenan-Flagler Business School is recasting its core ethics course in fall 2010 so that students can examine how, as managers, they would handle ethical dilemmas.

Schools also want to give students a better grasp of the role of governments and regulatory bodies, and the close ties between world economies.
New at Yale University's School of Management is "Washington and Wall Street: Markets, Policy and Politics."

New York University's Stern School of Business has added "Financial Crisis and the Policy Response."

Villanova University's School of Business is offering "Understanding the Global Marketplace in a Post-Bailout Economy," a team-taught class where professors bring in corporate and government leaders to offer perspectives on the crisis.

Yale School of Management is making "The Global Macroeconomy" a required course.
Dean Sharon Oster says the crisis exposed the interconnectedness of global economies; she wants to ensure students understand international ripple effects.

"One positive byproduct of the crisis may be that we start paying attention more to the importance of considering different models and different alternatives, not thinking about the American way or any one way of doing things as absolutely the best way," says Mauro Guillen, professor of international management at the University of Pennsylvania's Wharton School in Philadelphia, who organized a class taught by multiple professors on the crisis last year and is repeating it this year.

It's not the first time business schools have reworked their playbook after a crisis.
After Enron's collapse, for instance, schools added a slew of ethics classes. Many of those standalone courses have since fallen by the wayside, as schools now often say it's better to integrate ethics lessons into other coursework.

After each crisis, students "always ask, `how do we avoid this the next time around?' But crises are always different,"
says Georgetown's Prof. Aggarwal. "A couple years ago we spent a lot of time talking about Sarbanes-Oxley issues, we barely got away from it and now we have this whole new world."