We’ve been told that management changes at AIG means that current executives shouldn’t be blamed for the world destroying catastrophe and national embarrassment headquartered at 70 Pine Street in Manhattan. But the man who has been the chief risk officer of AIG, Bob Lewis, is still happily employed at the firm, according to the letter from the AIG employee we printed earlier.
Lewis, whose title is Chief Credit Officer, was right at the centre of the crazy risks AIG took. Or he whould have been, anyway. “He sets worldwide policy for AIG with respect to the extension of credit by all subsidiaries and divisions, establishes credit and risk management guidelines, identifies potential exposures, and establishes systems to manage and monitor such exposures on a global basis. He chairs the AIG Credit Risk Committee, established to oversee and approve all financial transactions, investments, and credit exposures outside certain established parameters and limits,” The Journal of Lending & Credit Risk Management said way back in 2000.
“The CCO’s ultimate responsibility is to see that credit risks are managed appropriately throughout the worldwide organisation,” Lewis told the magazine.
As late as 2007, Lewis was all happy talk about AIG. Here’s a quote from the second quarter analyst call from 1997:
In all the areas where we are active, we have strong risk management processes undertaken by experienced professionals. The risks we take are analysed based upon our own independent analyses, modelling, and monitoring. Risk tolerances and appetites are formulated and implemented within authorities allocated by senior management; and ongoing review and analysis is undertaken both in the businesses as well as at the corporate enterprise risk management level. Although the market may continue to experience a period of adjustment and volatility, our exposures are understood and well managed within an appropriate risk tolerance for a strong world leader in Insurance and Financial Services.
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