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Monday, September 29, 2008

Who was regulating AIG

The New York Times has a big article on the AIG failure.

I wonder how AIG was allowed to destroy itself. What about prudential regulation ?

Because it was not an insurance company, A.I.G. Financial Products did not have to report to state insurance regulators. But for the last four years, the London-based unit’s operations, whose trades were routed through Banque A.I.G., a French institution, were reviewed routinely by an American regulator, the Office of Thrift Supervision.


WHAAAT the office that regulates S&Ls ?!? how could they possibly be competent to regulate CDSs ? That does not seem to me to have been a reasonable approach to regulation. However it does give me an excuse to re re post this photo


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The man with the chain saw is James Gilleran then director of the Office of Thrift Supervision.

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