That's how in 2007 the Chief Credit Officer of AIG described the company's risk management process. At that point in time he said that credit-default swaps were "a business that we have been really involved with from the very inception." Last week, Mr. Liddy, the current CEO of AIG, told Congress, "We had risk-management practices in place. They generally were not allowed to go up into the financial-products business."
Who is describing reality? I think it must be Mr. Liddy because just about all of the company's risk management big-wigs are still employed by AIG despite the enormous losses the company has sustained largely because of their poor risk management process and practices.
Inertia is a very strong force, especially with regards to the higher-ups in large public companies.
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