It's No Joke: Fed Hires Failed Bank Executive

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krogoth's picture
krogoth
Status: Platinum Member (Offline)
Joined: Aug 18 2008
Posts: 576
It's No Joke: Fed Hires Failed Bank Executive

It's No Joke: Fed Hires Failed Bank Executive

Heckuva Job, Fed?

By JUSTIN ROOD

November 4, 2008—

The Federal Reserve Bank is drawing jeers for hiring a former top executive from the now-defunct investment bank Bear Stearns to help it gauge the health of other banks.

 

"How's this for sweet irony?" business publication Portfolio.com needled the pick.

 

Michael Alix was head of risk management for Bear Stearns for two years until the institution imploded this spring, a victim of its (risky) subprime-mortgage related investments.

 

Last Friday, the Federal Reserve Bank of New York quietly announced it had hired Alix to advise it on bank supervision.

 

"You're kidding me," said economic policy expert Dean Baker, of the Washington, D.C.-based Center for Economic Policy and Research. While he didn't know Alix personally, he said, "You would think [his record] would be a big strike against him."

 

The collapse of Bear Stearns led to its pennies-on-the-dollar buyout by J.P. Morgan Chase; the bank's shareholders saw their wealth plummet. To facilitate the buyout, the Fed agreed to assume potential billions in losses on bad Bear Stearns investments.

 

"[Alix] was the guy on the mast charged with yelling 'iceberg' just before the Titanic introducted its bow to a floating chunk of ice," wrote financial expert and blogger John Carney on the web site Clusterstock.com, where he flagged the hire.

 

The Fed's move "is sure to put to rest the notion that there are no second acts in American life," Carney observed drily.

 

A spokesman for the Federal Reserve declined to comment.

 

 

 

rlee's picture
rlee
Status: Silver Member (Offline)
Joined: Sep 18 2008
Posts: 148
Re: It's No Joke: Fed Hires Failed Bank Executive

What makes me sad personally here, is that I'm actually not the least bit shocked, and had it been any other venue, the mere thought of such a thing would shake you like a snow globe!

I guess I picked the wrong day to stop sniffing glue!

Bob 

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