AIG just released a statement explaining that the two executives who resigned from its French bank will remain in their roles until an orderly transition to new senior managemers can be undertaken. That presumably means one that doesn’t involve French banking regulators appointing officers, triggering CDS defaults and hammering European banks.
Here’s the AIG statement:
“AIG deeply appreciates that a number of executives who work for Financial Products in Europe have volunteered to return recent retention payments. Several employees, including Mauro Gabriele, President and CEO of Banque AIG, and Jim Shephard, Deputy CEO of Banque AIG, made this offer prior to the company’s formal request on March 18th. On March 20th, Messrs. Shephard and Gabriele resigned from their roles given shared concerns regarding their ability to conduct business in the current hostile environment toward Banque AIG and AIG FP employees generally. At the same time, they are fully committed to ensure that Banque AIG continues to operate normally and meet its obligations in these extraordinary conditions, and, as a result, they remain in their roles and have committed to effect an orderly transition. Given their commitment, we believe that the status of the Banque AIG derivatives book will remain unchanged and in good standing. AIG noted in its March 14th letter to Treasury Secretary Geithner that resignations at Banque AIG could raise risks with respect to derivatives written out of Banque AIG, and we are in ongoing discussions with French and U.K. regulators, as well as with the Federal Reserve Bank of New York and the U.S Treasury Department, about this matter. Banque AIG and FP employees continue to successfully execute precisely the job asked of them: to de-risk and unwind the FP business. To date, they have reduced the trade count from 44,000 to 28,000 — nearly 40%.”
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