These efforts for a private investment bank in Russia, however, came at the wrong time. The rule of law in Russia was simply too vague to support the kinds of commitments inherent in the investment banking relationships that … Greenberg envisioned. It was impossible to persuade Yeltsin to support the policies that would attract requisite foreign private investment. Although the oligarchs were enthusiastic about becoming investors themselves, they did not invariably support the kinds of reforms necessary to protect outside investors. The Russian economy stagnated through 1995 and, as erstwhile satellite states of the Soviet Union broke free across Eastern Europe, Russia defaulted on its sovereign debts in 1998. The ensuing crisis stoked Soviet-style appetites for order. In 1999, this brought to power Vladimir V. Putin, who reasserted substantial state control over the economy.
That control continues to this day. Had Greenberg’s visionary insights and recommendations been followed more closely, a different outcome might have been possible. Several decades later, his keen judgments have lost none of their force.
Lawrence A. Cunningham, a professor at The George Washington University Law School, is the author of a dozen books, and co-author, with Mr. Greenberg, of The AIG Story.