AIG says emergency aid used to pay other banks
American International Group Inc used more than $90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar US government bailouts.
The embattled insurer's disclosure on Sunday came amid outrage on Capitol Hill over its payment of tens of millions in executive bonuses, and followed demands from lawmakers that the names of trading partners who indirectly benefited from federal aid to AIG be made public.
The company, now about 80 percent owned by US taxpayers, has received roughly $170 billion from the government, which feared that its collapse could cause widespread damage to banks and consumers around the globe.
"The ability of AIG to meet its obligations is important to the stability of the US financial system and to getting credit flowing to households and businesses," Federal Reserve spokeswoman Michelle Smith said.
Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks - France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.
The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.