"We had no choice but to try to stabilize the system because of the implications that the failure would have had for the broad economic system," Bernanke said Tuesday. "We know that failure of major financial firms in a financial crisis can be disastrous for the economy."
But Maloney questioned whether this claim was valid. In support of her request, she appended a letter by Joseph Stiglitz, a Nobel prize-winning economist who was chief economic adviser to President Bill Clinton.
Stiglitz, who now teaches in the economics department at Columbia, said it's crucial that taxpayers be told where the money went so they can assess whether the failure to save AIG would have really imperiled the health of the financial system and the entire economy.
"If, for instance, the money went abroad, then it was unlikely that AIG's failure would have represented systemic risk to the U.S.," Stiglitz wrote. "If the money went to a large investment bank, then we can assess the impact on that bank."
http://money.cnn.com/2009/03/04/news/aig.transparency.fortune/index.htm
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A reliable source, however, has given FORTUNE a list of 15 counterparties, with no dollar figures attached. The list contained the names in the following order. FORTUNE sought comment from all of the financial institutions and none said their inclusion on the list was inaccurate.
Soci?t? G?n?rale (France)
Goldman Sachs (GS, Fortune 500)
Merrill Lynch International
Deutsche Bank (Germany)
Calyon, Cr?dit Agricole (France)
UBS (Switzerland)
Barclays (England)
Coral Purchasing, DZ Bank (Germany)
Bank of Montreal (Canada)
Rabobank (the Netherlands)
Royal Bank of Scotland
Bank of America
Wachovia
HSBC (England)
Barclays Global Investors
What is the significance of the rank order of the list? Since it is not alphabetical, one possible interpretation is that the banks are listed in order of the amount of CDOs they insured with AIG.
http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm?postversion=2009030910
But Maloney questioned whether this claim was valid. In support of her request, she appended a letter by Joseph Stiglitz, a Nobel prize-winning economist who was chief economic adviser to President Bill Clinton.
Stiglitz, who now teaches in the economics department at Columbia, said it's crucial that taxpayers be told where the money went so they can assess whether the failure to save AIG would have really imperiled the health of the financial system and the entire economy.
"If, for instance, the money went abroad, then it was unlikely that AIG's failure would have represented systemic risk to the U.S.," Stiglitz wrote. "If the money went to a large investment bank, then we can assess the impact on that bank."
http://money.cnn.com/2009/03/04/news/aig.transparency.fortune/index.htm
-----------------------------------------------------
A reliable source, however, has given FORTUNE a list of 15 counterparties, with no dollar figures attached. The list contained the names in the following order. FORTUNE sought comment from all of the financial institutions and none said their inclusion on the list was inaccurate.
Soci?t? G?n?rale (France)
Goldman Sachs (GS, Fortune 500)
Merrill Lynch International
Deutsche Bank (Germany)
Calyon, Cr?dit Agricole (France)
UBS (Switzerland)
Barclays (England)
Coral Purchasing, DZ Bank (Germany)
Bank of Montreal (Canada)
Rabobank (the Netherlands)
Royal Bank of Scotland
Bank of America
Wachovia
HSBC (England)
Barclays Global Investors
What is the significance of the rank order of the list? Since it is not alphabetical, one possible interpretation is that the banks are listed in order of the amount of CDOs they insured with AIG.
http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm?postversion=2009030910