According to a report on the 2008 credit crisis, more than 26 million Americans lost their jobs and about four million families lost homes to foreclosure. More than $10 trillion in household wealth vanished, with life savings and retirement accounts swept clean.

This was the worst financial crisis to hit the U.S. since the 1929 Great Depression.

What resulted in the 2008 credit crisis? How did bank CEOs respond to it?

Here’s what you need to know.

Too Big to Fail

Prior to the 2008 credit crisis, some financial institutions thought that they were too big to fail. However, this crisis exposed the shortcomings in many financial institutions showing how some banks were weak.

Making profit was their sole objective, rather than focusing on their clients or customers. This is how they ended up making the wrong business decisions.

Some financial institutions started formulating plans for counter-party at the expense of their clients. Since the counter-party remained faceless, these institutions lost touch with their main stakeholder-the customer.

Shifted Focus

These banks slowly shifted their focus from the traditional perspective of clients and customers to a trading perspective. This shift must have played a role in how the internal operations of the business changed, and how the banks CEO’s mindset changed.

Was there an awareness that there was significant risk building up in the banking system? Despite all the red flags, some CEOs weren’t willing to initiate that first step off.

It’s like every CEO was saying: “I don’t have to change anything since this is how every other CEO is playing- otherwise, my bank will lose.” It was a steep slope, but no one was willing to take a different route.

The Aftermath of the Crisis

Since the 2008 credit crisis, many CEOs have acknowledged that there was an issue with their management behaviors and internal cultures.

After the crisis, the bank CEOs embarked on crediting cultural transformation using the following strategies:

Culture Programs

Many CEO’s embarked on culture programs. They may have given these programs different names, but it really focused on the internal operations of the bank- all the way from the process used to attract talent, how they train their employees and the incentives and disincentives used.

This program goes to the top management. How can a bank make sure its CEO is walking the talk? Banks embraced culture-transformation programs to escape the crisis.

Restating and Recasting Values

After the crisis, most financial institutions had to restate their values and others came up with new values altogether. They had to evaluate what they wanted versus what they had.

In practical terms, banks introduced behavioral and cultural change through management practices. These practices ensured that the banks are meeting objectives with regard to terms of compliance.

The CEO’s also introduced measures such as climate surveys to protect the interests of their customers. Climate surveys seek to find if issues have escalated, and what’s the customer’s reaction when they witness unethical behavior.

2008 Credit Crisis Led to Key Changes in the Financial Sector

After the 2008 credit crisis, banks started to focus on their customers. Banks no longer focus on whether they are generating business for their stakeholders. Instead, they focus on whether they are doing it the right way.

This has resulted in both the positives, where some CEOs have cleared all those difficulties and got acknowledged, but also negatives, where prospective clients avoid the bank for having excessive compliance.

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