Ex-AIG chief executive Maurice “Hank” Greenberg blasts current CEO Edward Liddy as incompetent and has harsh criticism for the government’s bailout of AIG.
Greenberg told the Financial Times that Liddy’s criticism of his own tenure stems from ignorance. Liddy formerly headed Allstate.
“His background is much different running an auto insurance company than the background needed to run a global insurance company,” Greenberg says. “He wouldn’t be on any list you’d put together seeking a successor.”
Greenberg ran AIG from 1968 until he was pressured out after an accounting scandal in 2005. If he was still in charge, “we probably would have had some losses,” Greenberg says.
“But there would have been nothing like what took place. AIG would still be in place.”
Greenberg rejects criticism that he built a complicated structure at AIG.
“It wasn’t complicated at all,” he says. “We had a life division, a general insurance division, an asset management business, and a capital markets company.”
The government has destroyed AIG, Greenberg contends.
“AIG didn’t need cash in the beginning,” he argues. “It couldn’t make collateral calls for credit default swaps. It needed guarantees, not cash.”
Instead, the government put in $85 billion in return for a 14.5 percent interest rate and a 79.9 percent equity stake. “That’s a way to liquidate a company, not save it,” Greenberg says.
Retired insurance mogul Eli Broad also has given up on AIG.
“If you look at what has happened, I think it is too late,” he told Reuters.
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