The English Restoration of the 1600s, the one with the capital "R," is almost as well known for its theatrical comedies as for the revival of the monarchy in England, Scotland and Ireland. The current American financial restoration, the one with the small "r," is perhaps narrower historically but not without its comic, and in some cases, tragicomic effects.
In the latter instance, I refer to the hurried attempts by the U.S. financial community to "restore" confidence in an outraged citizenry and thereby rescue its reputation and its business for the future.
In the insurance sector, American International Group Inc. is, of course, the prime example. Amazingly, AIG, the premiere entry in the U.S. property/casualty business for generations, is so devalued because of recent events that it is trying to rebrand itself of late as AIU Holdings.
Actually, it's an exercise in retrobranding, in that the organization post-C.V. Starr was called American International Underwriters, or AIU. The insurance side of the operation, which hasn't been terribly involved in the recent scandals, is desperately distancing itself from the group's financial services unit, which has caused all the difficulty.
Distancing himself as well from the mess at AIG is Maurice "Hank" Greenberg, its longtime kingpin. His latest exercise in finger-pointing and dodging blame came at a recent congressional hearing. Appearing before the House Committee on Oversight and Government Reform, Greenberg, now in effect an AIG outsider, the beleaguered octogenarian beset by his own legal difficulties, acted for all the world as he had the answer to the company's woes and made it clear that he had no responsibility for them and that things would have turned out differently had he remained in charge.
It was a posture that was greeted coolly by the House panel, as coolly as current CEO Ed Liddy's testimony was received earlier in congressional testimony. Both of them were roughed up in Washington.
Greenberg said the problems at AIG, after his departure, were a consequence of management problems, presumably not of his making. He said the problems developed in his absence because there was no "control and oversight at AIGFP," the very financial services unit he created and the one that has caused all the mischief.
"When they lost the triple-A rating," he testified, "they should have slowed the writing of credit default swaps. They should have called a halt," he said.
With respect to the much-maligned retention bonuses AIG has paid to executives at the financial services unit, Greenberg said, "I don't accept responsibility for AIG's problems."
No Greenberg fingerprints on this one, he seemed to be saying.
Clearly, Greenberg seemed to be intimating that things would be different if he were still at the helm, didn't he?
It won't happen of course, but it's fun to speculate if the old genius were restored to the throne and son Jeffrey was back in power at Marsh.
That would be the ultimate "restoration" comedy.
THOMAS J. SLATTERY,
a writer on industry affairs, is managing director of Slattery-Esterkamp Communications, Baldwin, N.Y.
May 1, 2009
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