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TheStreet Open House

The 5 Dumbest Things on Wall Street: Oct. 8

3. AIG Praises Blind Watchdog

American International Group (AIG) may go down in history as being mostly responsible for one of the greatest financial catastrophes in U.S. history. But have no fear, the person whose job it was to prevent all that is walking away with a gold watch and a tidy health plan.

Robert Lewis -- AIG's "Chief Risk Officer" prior to, during and after the 2008 financial crisis -- is hanging up his obviously malfunctioning calculator and heading off into the sunset. And according to published reports, AIG CEO Robert Benmosche sent a note to employees thanking Lewis for his service, adding that his "hard work, leadership and dedication have been invaluable to the organization through tumultuous times."

Awesome, Bob. Simply awesome. Now excuse us while we go look up the definition of "invaluable."

Indeed, during his dinner speech at the going-away party, Benmosche may want to skip the fact that AIG received a $182 billion rescue package after the insurer became a giant black hole, sucking up every penny of financial risk it could find prior to the 2008 crisis. And he may want to avoid discussing how, as the chief risk officer of the world's largest risk aggregator Lewis could have, just maybe, raised a few questions before all that unpleasantness occurred.

In Lewis' defense, chief risk officers have always been the prettiest eunuchs in the financial executive boardroom. CROs at banks and insurers can go to conferences to talk about risk and hire consultants' measure risk, but they ultimately have very little to power to curtail risk taking.

Still, during hearings by the Financial Crisis Inquiry Commission, Lewis himself testified that, gosh darn it, he may have missed a few things. "What ended up happening was so extreme that it was beyond anything we had planned for," Lewis told the panel. "As it turned out, we were wrong about how bad things could get."

Well, as long as you put it that way...

TheStreet Says: Millions of Americans lose their jobs in the Great Recession, and this guy doesn't?!?

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