Report: AIG bailout riddled with conflicts of interest

[Donnachaidh]

http://news.muckety.com/2010/06/10/report-aig-bailout-riddled-with-conflicts-of-interest/26571

When risk management is downplayed by a global conglomerate, disaster can result.

That was the finding of a Congressional Oversight Panel report released yesterday.

No, the subject wasn’t BP. In this case, the focus was AIG, recipient of $182 billion in federal bailout money.

:snip for chart - see at link:

The panel criticized the Federal Reserve and Treasury Department for failing to exhaust other options before committing taxpayer dollars to save the insurance giant.

Instead, the panel found, the AIG rescue “distorted the marketplace by transforming highly risky derivative bets into fully guaranteed payment obligations.”

Here’s why this is a Muckety story: “Throughout its rescue of AIG, the government failed to address perceived conflicts of interest,” the report says.

Lawyers, investment bankers and regulators held multiple, often conflicting roles.


More at the link --