AIG Bailout 'Poisonous' To Wall Street, Report Says

Law360, New York (June 10, 2010, 12:09 PM EDT) -- The $182 billion federal bailout of American International Group Inc. had a “poisonous effect” on financial markets, sending a signal to Wall Street that risky bets would have a government guarantee, according to a congressional watchdog report released Thursday.

The decision to pay AIG's counterparties on credit default swaps, including Goldman Sachs Group Inc. and JPMorgan Chase & Co., came in for especially harsh criticism from the Congressional Oversight Panel, which is headed by Harvard Law School professor Elizabeth Warren and charged with overseeing the federal...
To view the full article, register now.