“Nearly a year after perhaps the most sensational corporate collapse in the history of finance ... AIG's losses and the trades that led to them still haven't been properly explained,” Michael Lewis writes in the latest issue of Vanity Fair. Investigating the collapse himself, Lewis argues that a power vacuum inside AIG Financial Products led to CEO Joe Cassano's reign of terror. According to Lewis, Cassano was "a man who didn’t fully understand all the calculations and whose judgment was clouded by his insecurity." One employee said Cassano changed the culture and raised the "fear level" to a fever pitch. Cassano valued loyalty above all else, discouraged dissent, and measured his own self-worth worth via his status in the financial world. Essentially, he created a culture of fear in which criticism and opposing viewpoints were discouraged, eliminating a necessary failsafe inside the company that led to AIG.'s most fatal and faulty credit-default swaps.
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