Under growing pressure – AIG names recipients of its bailout money

March 16, 2009

(ChattahBox) — Giant insurer and bailout recipient king American International Group has received $170 billion in bailout guarantees, meaning taxpayers own almost 80 percent of the company. The company faced harsh criticism over the weekend from White House officials and everyone else who reacted strongly to news that AIG had intended to pay out $165 million in bonuses and compensation. Of further growing concern to those on both Capitol Hill and the public is the secrecy surrounding  billions funneled to A.I.G.’s counterparties since it nearly collapsed last fall, which has offered sweet relief for some.   A.I.G.’s counterparties were saved from losses on deals they struck with the insurer, because the policies they agreed to theoretically protected them from losing money if the debt they had purchased defaulted. Billions of taxpayer money was used to satisfy or exit these credit default swaps, as well as insurance contracts on securities.

After months of stonewalling, AIG has now revealed the names of the counterparties that were funneled the billions in taxpayer funds.  The list released Sunday of “counterparties” that benefited from the bailout is topped by European banks Societe Generale and Deutsche Bank, which per existing credit swap agreements, received $4.1 billion and $2.6 billion, respectively. Wall Street firms Goldman Sachs and Merrill Lynch round out the top four, receiving $2.5 billion and $1.8 billion, respectively.

AIG also had to post $43.7 billion during the quarter to unwind its securities lending business and $12.1 billion to different municipalities that had guaranteed investment policies. California and Virginia received $1 billion each.

Also during the fourth quarter, AIG spent $27.1 billion of its bailout money trying to entice counterparties to exit their positions. EWith Societe Generale receiving $6.9 billion; Deutsche Bank  $2.8 billion, UBS $2.5 billion, Goldman Sachs $5.6 billion and Merrill Lynch received $3.1 billion.


Comments

One Response to “Under growing pressure – AIG names recipients of its bailout money”

  1. jerome roberts on March 16th, 2009 4:56 pm

    AIG bosses needs a bit of Russian PM Putin style. Take away their assets and send to prison. The world will be better off if a few heads roll than millions. Thank you very much for reading my comment.

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