Failure to assess risk properly contributed to financial turmoil, UN envoy Stephen Lewis tells RIMS Canada Conference

At least US$1 trillion will be used to bail out the major capitalist financial structures of the United States of America because of a complete contempt for regulation and the absence of intuitive discernment on the part of risk managers, according to Stephen Lewis, former leader of the NDP and special envoy UN Secretary-General Kofi Annan.
“Or, if I may put it another way, the willingness to suspend the analysis and assessment of risk when it seemed that profits were accumulating in such huge volumes,” Lewis said. “And everyone is now calling it the purchase of ‘toxic assets.'”
Lewis was speaking to delegates attending the 33rd Annual Risk and Insurance Management Society (RIMS) Canada Conference in Toronto.
Lewis said Democrats and Congress in the United States would no doubt pass the US$700-billion bailout package designed to calm investors after the demise of two major U.S. investment banks and the American International Group (AIG), the world’s largest insurer by assets.
“But they are quietly in a froth of anxiety over the fact that the United States is bailing out the wealthy, while the people who have suffered so terribly in the subprime crisis those who have lost their homes and whose homes are now in jeopardy have no such bailout possibility whatsoever.”