US, Europe
Banks Get Cash From AIG Rescue: Report
At least two dozen American and European banks benefited from
the bailout of American International Group, with
approximately $50 billion paid out to them since the Federal
Reserve first gave aid to the insurance giant, the Wall Street
Journal reported Saturday.
Goldman Sachs [GS
75.65 
-6.07
(-7.43%)
] and Deutsche
Bank received about $6 billion between September and
December last year, the paper said, quoting a confidential document
and people familiar with the matter.
Other banks that received large payouts from AIG late
last year include Merill Lynch, which was bought
by Bank of America [BAC
3.14 -0.03
(-0.95%)
] , and France's Societe
Generale, according to the report.
Morgan Stanley [MS
17.18 -0.80
(-4.45%)
] , Royal Bank
of Scotland, HSBC,
Calyon, Barclays,
Rabobank, Danske Bank,
Santander, Wachovia and
Bank of America are also among the counterparties
who benefited from the AIG bailout, the paper said.
AIG, whose $61.66 billion fourth-quarter loss was the
largest ever for a US company, received $30 billion more in
government funds last Monday.
The insurer's financial health hasn't improved despite
getting as much as $150 billion from the government last year.
Lawmakers have pressed the insurer to disclose its
counterparties and have slammed the secrecy of banking
bailouts.
Fed Vice Chairman Donald Kohn said revealing names
risked jeopardizing AIG's continuing business but said the
counterparties numbered in the "millions" and were spread all over
the globe, including pension funds and US households, according to
a Reuters report.
Congressmen criticized the generosity of the bailout
for counterparties, and one lawmaker said AIG had to be bailed out
because otherwise it was "going to bring down Europe."
The names of the counterparties who benefited from the
AIG rescue have still not been officially disclosed.
The taxpayer-funded rescue of AIG helped prevent its
counterparties from sustaining immediate losses on mortgage-backed
securities and other assets they had insured through the
company.
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one of the reason why AIG was bailout.