Friday, 25 September 2009

G20: oh, my God!

I have written a blog for Left Foot Forward on the G20 Summit in Pittsburgh. It starts off with an anecdote recounted in a recent New Yorker piece by James B. Stewart. My summary:
As they discuss the imminent collapse of Lehman Brothers, Flowers turns to Paulson and says, “By the way, have you been watching A.I.G.?”

“Why, what’s wrong at A.I.G.?”

“Well, you should take a look at this.” Flowers handed Paulson a spreadsheet he had received from A.I.G.

“Oh, my God,” gasps Paulson and the rest is history.
The G20 in London was a stunning success. This one less so. Significantly, less so. Why? Becuase not enough progress has been made on managing financial risk going forward. Or, to put it another way:
A future Hank Paulson is less likely to intone ‘oh, my God.’ But I wouldn’t bet the cash in a sock at the back of your wardrobe against it.

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