MBIA CEO Speaks on America's Liquidity Crisis
On April 21st, the McDonough School of Business welcomed MBIA Chairman and CEO Joseph W. Brown, Jr., for a discussion with faculty and students about the current liquidity and mortgage crisis. During his talk, titled "America's Liquidity Crisis: How We Got Here, Where We Are, and What the Future Holds," Brown provided his perspective as the head of MBIA, one of the world's largest financial guarantors and leading providers of fixed-income investment management services.
McDonough School Dean George Daly introduced Brown as a person who is "ideally positioned to speak about the ongoing crisis and its effects on the capital markets as well as on individual investors."
During his presentation, Brown noted that the bond insuring industry did not create the crisis and is merely responding to the actions of others. Much of the responsibility for the current situation, he said, rests with those who made the initial high-risk home mortgage loans. According to Brown, this practice, along with 'bundling,' or packaging the loans for sale as mortgage-backed securities, contributed to the current problems in the mortgage industry.
Brown's prognosis, however, is positive. He believes that the liquidity crisis may be over in six-to-nine months, and the mortgage industry will stabilize within a one-to-two year timeframe.
Mr. Brown, a member of the MSB Parents Advisory Council, has enjoyed a successful career as the CEO of Fireman's Fund and Safeco, and later as Executive Chairman of MBIA, from which he retired in May of 2007. Once the dimensions of the current credit problem became known in February of 2008, MBIA's board asked him to return to the company to lead it through this difficult period in the industry.
About the Robert Emmett McDonough School of Business
Georgetown University's McDonough School of Business is a premier business school located in the nation's capital. Founded in 1957 to educate undergraduate business students through the integration of liberal arts and professional education, the McDonough School today welcomes approximately 1,300 undergraduates, 620 MBA students, and more than 500 participants in its executive education programs annually. For more information about the McDonough School, visit http://msb.georgetown.edu.
About Georgetown University
Georgetown University is the oldest Catholic and Jesuit university in America, founded in 1789 by Archbishop John Carroll. Georgetown today is a major student-centered, international, research university offering respected undergraduate, graduate and professional programs on its three campuses. For more information about Georgetown University, visit http://www.georgetown.edu.