Davos cross-post: AIG vice chairman Jacob Frenkel says it’s not his fault because he’s vice chairman in name only

The Tayyip Erdogan-Shimon Peres rumble last night was partly about Gaza. But it was also about the limitations of panel moderation at Davos. I don’t mean to single out David Ignatius, whose failure to keep Israeli President Peres from vastly exceeding his allotted time apparently incensed the Turkish prime minister. I had been at another panel Thursday morning where Peres rambled on and on, ignoring several polite nudges from moderator Maria Ramos, a South African CEO. The prominence and self-importance of many of the speakers here, coupled with a certain cultural sensitivity to behaving in ways that people from other countries might find obnoxious, seems to keep moderators from exercising the discipline often needed to make discussions work.

So it was refreshing this afternoon to watch the BBC’s Nik Gowing make no attempt to avoid obnoxiousness in a made-for-TV discussion about financial crisis and regulation. He was especially tough on Jacob Frenkel, the former University of Chicago economist and Israeli central bank chief who for the past few years has possessed the (now somewhat embarrassing) title of vice chairman of AIG.

In past years—especially last year—Frenkel was Davos’s designated optimist. By now he has acceded to reality, essentially conceding today that everything his fellow panelist and former intellectual antagonist Nouriel Roubini said was right. But when Gowing asked him about his culpability for AIG’s colossal wipeout, Frenkel initially avoided the question by saying there had been a systemic collapse in which AIG had been caught up. In a disbelieving voice, Gowing kept pressing him, finally leading to this exchange:

Gowing: So there’s no personal responsibility?

Frenkel: At least as far as I’m concerned, there isn’t.

Later, Frenkel explained that, despite his fancy title, he’s not actually on AIG’s board. (He didn’t say this, but I think he was basically hired to represent the firm at events like Davos.) It was sporting of him to even show up, I guess—I didn’t see anybody else from a bailed-out financial firm on hand—and even more sporting to submit to Gowing’s interrogation. But Davos could definitely use a bit more of Gowing’s attitude this year.

Stocks Rally Further in Run-up to EU Summit

MOSCOW — Global stocks enjoyed one of their best days in weeks on Tuesday ahead of a summit of European leaders that’s expected to be dominated by calls to boost economic growth.

Europe remains the focus of attention across all financial markets in the run-up to the June 17 Greek election that could go a long way to determining the country’s membership of the euro as well as the future of the single currency zone.

donthelibertariandemocrat

It never fails to amaze me that when things go sideways or even worse, these well compensated financial types, so used to being thought of as geniuses because they make a lot of money, suddenly admit to being useless or idiots. They’ll admit to anything to avoid taking responsibility, which might get them sued or worse. It’s like a pantomime, which occurs every few years, instead of yearly at Christmas.
banzai7

WE’RE AN AMERICAN SCAM
(We’re an American Band, Grand Funk Railroad)
WilliamBanzai7

Had my bonus barely thirty days,
Last night Obama put me in a purple haze.
Sweet, sweet con jobs — that’s my act,
We had the whole show and thats an unnatural fact.
Up all night watchin Larry King,
Got to tell you jokers bout Wall Street Bling.
Booze n Ponzi tradin keep me right,
As long as we can make it through the show we’re alright.

Chorus
We’re an American SCAM.
We’re an American SCAM.
We’re coming to your town, well drive your net worth down.
We’re an American SCAM.

Four SPIVs from Bermuda,
Just waitin for the returns from the good old days.
Feelin good, feelin right, its Saturday night,
The SEC detectives — still out-a-sight.
Now, these fine Wall Street bankers, they had a plan,
They was out to get bailout bonus toys in their hands.
They said, come on, dudes, lets get it on,
And they proceeded to tear the markets down.

Chorus

We’re an American SCAM…
banzai7

As a member of the “Chicago School” he is culpable in the systemic meltdown that he lamely points to as an excuse.

I am waiting for your post on Obama’s bonus rant
plukasiak

what kills me is that the people who have been “right all along” don’t seem to be dominating these discussions — those advocates of fundamental change remain marginalized as the idiots who got us into this mess try to figure out ways to ‘tweak’ the system, or apply band-aids to gaping wounds.
_
IMHO, every business leader there should be tied to their chairs and subjected to “forced re-education” by Roubini, et al… and then held hostage until they collectively pony up a couple of trillion dollars to help the victims of their excess.