2009 0305 - GOV (Senate) - American International Group: Examining What Went Wrong, Government Intervention, And Implications for Future Regulation

  • (p4-5) - Senator Shelby (R-AL):  AIG’s problems, however, were not isolated to its credit default swap business.
    • Significant losses in AIG’s State-regulated life insurance companies also contributed to the company’s collapse.
    • Because AIG was unable to cover its obligations to both its securities lending and derivatives operations, it ultimately had to seek Federal assistance.
  • (p9) - Dinallo:  I think that it is important to put some of these numbers in context, because I disagree with the concept that the securities lending program had much of anything to do with the problems at AIG. 
  • (p10) - Dinallo:  The securities lending business, . is ...not the purpose or the reason for the Federal bailout.
    •  If there had been no Financial Products division involvement, I don’t think there would have been any bailout of AIG’s operating companies, certainly not the securities lending business.