Paulson says he, Geithner acted properly on AIG

[autorank]

Collapse would have "wrought economic havoc"

REUTERS Jan. 26

WASHINGTON, Jan 26 (Reuters) - Former U.S. Treasury Secretary Henry Paulson staunchly defended the decision to rescue troubled insurer American International Group Inc (AIG.N) in 2008 and said he and others involved acted properly.

In testimony prepared for a hearing on Wednesday of the U.S. House of Representatives Oversight and Government Reform Committee, Paulson said he, Timothy Geithner who then was president of the New York Federal Reserve bank, and Fed Chairman Ben Bernanke acted properly because the situation was dire.

"If AIG collapsed, it would have buckled our financial system and wrought economic havoc on the lives of millions of our citizens," said Paulson, who headed Treasury from 2006-2009 in the former Bush administration.

The hearing is to examine how AIG handled payments to banks that were counterparties for credit default swaps that AIG had issued and to examine why it paid 100 cents on the dollar to settle them rather than getting a discount. SNIP

More than $180 billion of taxpayers' funds eventually were invested in bailing out AIG, which Paulson said was both "a mismanaged and misguided enterprise."

Link: http://www.reuters.com/article/idUSN2610214420100127

[leftstreet]

1. K&R

[Demeter]

2. Nobody's got the goods on Paulson, Yet

So it's too early to expect confessions and apologies....

[LWolf]

3. Of course he does. nt