AIG - Securities Lending - Leverage

  • 2008 Financial Crisis - AIG - Securities Lending - 1) Ed Royce (R-CA), Dodd vs Eric Dinallo
  • https://www.govinfo.gov/content/pkg/CHRG-111shrg51303/pdf/CHRG-111shrg51303.pdf
  • 1) Ed Royce (R-CA) - And then came the fall of AIG.
    • And the bets that brought down AIG were made through the firm’s securities lending division as well as the financial products unit.
    • As we consider the events of the past as they relate to regulatory reform, it is worth noting that the securities lending division was facilitated and funded by AIG’s insurance subsidiaries as a vehicle to make unwise bets on the U.S. housing market.
    • At least, that is the way I would put it, since they were leveraged 170 to 1.
  • Using capital from their insurance subsidiaries with the approval of the various State insurance regulators, the securities lending division, in tandem with the financial products unit, put at risk the
    entire company and, to some degree, the broader financial system.

2009 0514 - GOV (House) - How Should the Federal Government Oversee Insurance? - [PDF-194pVIDEO-YouTube-(Part 1 of 2) - VIDEO-YouTube-(Part 2 of 2)]  ---  [BonkNote]