Panel to grill Goldman and AIG on ties to crisis
By Steve Eder |
July 1, 2010, Thursday
|
Print Edition
Print Edition
GOLDMAN Sachs and bailed out insurer American International Group face a rough two days of questioning about the destructive relationship that contributed to the 2008 financial crisis.
The Financial Crisis Inquiry Commission will zero in on the ties between Goldman Sachs and AIG, and how the two financial giants sold derivatives that deepened the crisis.
The congressionally appointed panel begins two days of hearings yesterday, headlined by former AIG Financial Products head Joseph Cassano and Goldman President Gary Cohn.
A key focus will be "how the interaction of these two financial giants may or may not have contributed to the causes of the financial crisis," Phil Angelides, chairman of the FCIC, said on Tuesday.
Goldman has long been criticized for benefiting from American taxpayers' bailout of AIG. Taxpayers pledged up to US$182 billion to address problems at AIG's financial products division.
United States and European banks that had purchased credit protection from AIG were quickly made whole after the US government bailed out AIG. Goldman, as a major trading partner of the insurer, was one of the biggest beneficiaries of the government rescue of AIG.
AIG said in March 2009 that US$93 billion had been paid to banks, including US$12.9 billion to Goldman Sachs, which was the most received by any bank.
Cassano, who has evaded public appearances since leaving the bailed-out insurer more than two years ago, participated in more than five hours of preliminary interviews with the FCIC's staff, Angelides and Vice Chairman Bill Thomas said.
The Financial Crisis Inquiry Commission will zero in on the ties between Goldman Sachs and AIG, and how the two financial giants sold derivatives that deepened the crisis.
The congressionally appointed panel begins two days of hearings yesterday, headlined by former AIG Financial Products head Joseph Cassano and Goldman President Gary Cohn.
A key focus will be "how the interaction of these two financial giants may or may not have contributed to the causes of the financial crisis," Phil Angelides, chairman of the FCIC, said on Tuesday.
Goldman has long been criticized for benefiting from American taxpayers' bailout of AIG. Taxpayers pledged up to US$182 billion to address problems at AIG's financial products division.
United States and European banks that had purchased credit protection from AIG were quickly made whole after the US government bailed out AIG. Goldman, as a major trading partner of the insurer, was one of the biggest beneficiaries of the government rescue of AIG.
AIG said in March 2009 that US$93 billion had been paid to banks, including US$12.9 billion to Goldman Sachs, which was the most received by any bank.
Cassano, who has evaded public appearances since leaving the bailed-out insurer more than two years ago, participated in more than five hours of preliminary interviews with the FCIC's staff, Angelides and Vice Chairman Bill Thomas said.
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