Bear Stearns Risk Officer Joins Fed ~ market folly

Monday, November 10, 2008

Bear Stearns Risk Officer Joins Fed

I'll come out and say the obvious: This has got to be one of the stupidest things I've seen in a while. If you haven't already heard, Michael Alix, former chief risk officer at Bear Stearns, was just hired by the Federal Reserve. First of all, the words 'risk officer' and Bear Stearns should not even be put in the same sentence. Taken from Today's Financial News,

"In one of the latest what-were-you-thinking moves, the Federal Reserve just announced it has hired Michael Alix as a bank regulation advisor. Who the heck is Michael Alix, you ask? He is the former chief risk officer at Bear Sterns, a company that thought risk-management was an oxymoron. Essentially, he is the guy that allowed Bear Sterns to get so over-leveraged, it collapsed under its own weight. Now, he is an advisor for the Federal Reserve. At the very least, he can tell us what not to do. Frankly, I believe the Fed’s hiring of one of the executives at the center of today’s market fiasco proves that the “good-old boy” system remains alive and well in Washington. It is a disgrace."


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