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Geithner's Deadbeats
• ForbesBut what of the large institutions that have not yet repaid the government and have enormous debts? That's where the panel--no surprise--focused its questions for Geithner.
At the top of the list is AIG ( AIG - news - people ). The insurer would have gone bankrupt if not for the string of bailouts it received from the Treasury and Federal Reserve. (AIG owes $86.8 billion to the government. See "What AIG Really Owes Taxpayers.")
Elizabeth Warren, the panel's chair, pressed Geithner for details of the AIG bailout. Much of it was used to pay obligations to the counterparties of its complex derivatives. Thanks to the bailout, these counterparties received payments on their contracts of 100%, essentially a backdoor bailout. If AIG had gone bankrupt, these payouts would have been lessened.
The Treasury has yet to offer a detailed explanation for why AIG's counterparties needed to be paid in full.
1 Comments in Response to Geithner's Deadbeats
I _still_think he looks like an alien. See the dome-shaped forehead formation and large domelike head and elfin ears...
Scary......