International banks and financial companies in Germany, Spain, Ireland, Britain and Hong Kong were indirect beneficiaries of the US government’s 2008 bailout of American International Group Inc (AIG), according to newly released documents.
The documents released by Senator Chuck Grassley contain a list of the 27 banks, hedge funds and financial companies that received US$4.3 billion from Goldman Sachs Group Inc. The money was to reimburse them for losses on investments called credit default swaps that plunged in value during the financial crisis.
The money trail actually began with AIG, which sold the swaps to Goldman. The big investment bank in turn sold them to its customers, including the international banks and financial companies. When AIG received a bailout worth US$182.5 billion, it reimbursed Goldman and other banks, which then repaid their customers.
Credit default swaps are essentially contracts that insure against the default of bonds and corporate debt. Sellers of swaps, such as AIG, are obligated to repay customers if the value of the underlying bonds or debt declines.
Much of the federal rescue money for AIG was used to pay its obligations to its Wall Street trading partners on credit default swaps. The biggest beneficiary of the AIG money was Goldman, which received US$12.9 billion.
According to Grassley, the documents show that the five banks or companies ultimately receiving the largest amount of taxpayer money were DZ Bank AG in Germany, which received US$1.18 billion; Banco Santander Central Hispano SA of Spain, which received US$484 million; Ireland’s Zulma Finance PLC, which received US$416 million; Infinity Finance PLC in Britain, which received US$277 million; and Britain’s Sierra Finance PLC, which received US$223 million.
Another US$173 million went to Hongkong & Shanghai Banking Corp, which has HSBC operations throughout the US.
Goldman had previously disclosed that it had made payments to its customers, but did not say who the recipients were. It gave the information to Grassley after he threatened to subpoena the bank.
Grassley released the documents showing the payments late on Friday.
The payments have been controversial because of concerns that the banks should have absorbed more losses on their investments rather than be reimbursed with taxpayer money.
Last month, a watchdog panel raised new doubts over the likelihood taxpayers will be fully repaid for the government’s bailout of AIG.
“The government determined that a collapse of AIG would be systemically disastrous,” Goldman Sachs spokesman Lucas van Praag said. “And of course if a systemic problem had ensued, we along with every company in the world would likely have been affected.”
Taiwanese Olympic badminton men’s doubles gold medalist Wang Chi-lin (王齊麟) and his new partner, Chiu Hsiang-chieh (邱相榤), clinched the men’s doubles title at the Yonex Taipei Open yesterday, becoming the second Taiwanese team to win a title in the tournament. Ranked 19th in the world, the Taiwanese duo defeated Kang Min-hyuk and Ki Dong-ju of South Korea 21-18, 21-15 in a pulsating 43-minute final to clinch their first doubles title after teaming up last year. Wang, the men’s doubles gold medalist at the 2020 and 2024 Olympics, partnered with Chiu in August last year after the retirement of his teammate Lee Yang
FALSE DOCUMENTS? Actor William Liao said he was ‘voluntarily cooperating’ with police after a suspect was accused of helping to produce false medical certificates Police yesterday questioned at least six entertainers amid allegations of evasion of compulsory military service, with Lee Chuan (李銓), a member of boy band Choc7 (超克7), and actor Daniel Chen (陳大天) among those summoned. The New Taipei City District Prosecutors’ Office in January launched an investigation into a group that was allegedly helping men dodge compulsory military service using falsified medical documents. Actor Darren Wang (王大陸) has been accused of being one of the group’s clients. As the investigation expanded, investigators at New Taipei City’s Yonghe Precinct said that other entertainers commissioned the group to obtain false documents. The main suspect, a man surnamed
US Secretary of the Treasury Scott Bessent and US Trade Representative Jamieson Greer began talks with high-ranking Chinese officials in Switzerland yesterday aiming to de-escalate a dispute that threatens to cut off trade between the world’s two biggest economies and damage the global economy. The US delegation has begun meetings in Geneva with a Chinese delegation led by Chinese Vice Premier He Lifeng (何立峰), Xinhua News Agency said. Diplomats from both sides also confirmed that the talks have begun, but spoke anonymously and the exact location of the talks was not made public. Prospects for a major breakthrough appear dim, but there is
The number of births in Taiwan fell to an all-time monthly low last month, while the population declined for the 16th consecutive month, Ministry of the Interior data released on Friday showed. The number of newborns totaled 8,684, which is 704 births fewer than in March and the lowest monthly figure on record, the ministry said. That is equivalent to roughly one baby born every five minutes and an annual crude birthrate of 4.52 per 1,000 people, the ministry added. Meanwhile, 17,205 deaths were recorded, resulting in a natural population decrease of 8,521, the data showed. More people are also leaving Taiwan, with net
RSS