Boisi Offers His Perspective on Financial Crisis

Last Thursday, Geoffrey Boisi, CEO of Roundtable Investment Partners, presented his views on the current economic crisis to a crowd of students, faculty, and business professionals in Cushing Hall.

Boisi, who has previously worked with such organizations as JP Morgan and Goldman-Sachs, serves as a trustee to Boston College and is the namesake of the Boisi Center for Religion and American Public Life. During his lecture, Boisi spoke on the current situation of the financial markets, which, he said, "have faced the largest decline since 1925."

One issue he highlighted in his address was the issue of trust in financial markets. Boisi said that the financial industry is "fundamentally based on trust and relationships" between constituents of business, such as clients, managers, regulators, employees, and investors. "It is important that there is a balance between those constituents," he said. "When that balance is broken, there is uncertainty. When there is significant uncertainty, and when trust breaks down, every component works for its own interests, and fear settles in. The system breaks down."

Boisi drew historical parallels, explaining the current financial situation by analyzing the Great Depression economy and the formation of the Federal National Mortgage Association (Fannie Mae) and the Federal Mortgage Home Association (Freddie Mac).       

Boisi said that the formation of these two entities presented issues the government is still dealing with. "Freddie and Fannie's origins as private companies under government control led to conflict of interests."

While much has been done to alleviate the current economic crisis, there is still much more to do. "We're not out of the woods yet, though I think the immediate threat of another crash may be alleviated," Boisi said.

Students attending the lecture said they enjoyed Boisi's speech, and that his corporate background was apparent in his talking points. "I think his overall point was very good," said Catherine Lynch, CSOM '10. "The different dynamics involved from his point of view was also interesting. As a head of corporate America, it's understandable why he would like less government interference."