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Reports name AIG's derivative counterparties
The federal bailout of insurance giant American International Group Inc. has benefited at least two dozen U.S. and foreign financial institutions who collected some $50 billion, according to media reports 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 include Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008. 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," did not supply dollar amounts that each bank received. The disclosures come the same week the Fed refused a congressional request for the names of all AIG's derivative counterparties. At a hearing 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 remains in the financial markets. AIG on Monday reported a $61.7 billion quarterly loss, the worst in U.S. history. The same day, Treasury provided AIG as much as $30 billion in additional aid from the $700 billion financial bailout program, bringing the company's total bailout to more than $170 billion since September. The government now owns nearly 80 percent of the company. AIG has been forced to seek more help in part because of the ongoing recession and its falling stock price, now well under $1. Among its biggest problems: It can't sell assets to pay back government loans because the credit crisis is preventing would-be buyers from getting financing to complete such deals. A representative with New York-based AIG wasn't immediately available to comment. Posted by: tipper 2009-03-09 |
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