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...
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