The US bailout of insurance giant American International Group Inc (AIG) has benefited at least two dozen US and foreign financial institutions who collected some US$50 billion, media reported on Saturday.
AIG — once the world’s largest insurer — is paying money to its counterparties because it had agreed to guarantee them against losses from credit default swaps they had invested in.
Citing a confidential document and people familiar with the matter, the Wall Street Journal said recipients of AIG money included Goldman Sachs Group Inc and Germany’s Deutsche Bank AG, each of which received US$6 billion in payments up to last December.
Also receiving AIG money last year were Merrill Lynch, now part of Bank of America Corp, French bank Societe Generale SA and, to a lessor extent, Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, the newspaper said.
Meanwhile, business magazine Fortune on Saturday issued its own list of 15 banks that received AIG money, including: Calyon, Credit Agricole of France; UBS; Barclays; Coral Purchasing, DZ Bank of Germany; Bank of Montreal; Rabobank of the Netherlands. Fortune, which credited a “reliable source.”
The disclosures come the same week the US Federal Reserve refused a congressional request for the names of all AIG’s derivative counterparties. At a hearing on Thursday, Federal Reserve Vice Chairman David Kohn declined to reveal who had been made whole after deals with AIG went bad, arguing that the information would undermine what little confidence remained in the financial markets.
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