William Black

Did Geithner & Co cave in to the banks?

At the height of the great financial collapse of 2008, insurance giant AIG could not come up with enough cash to reimburse the many companies and countries that had insured against a collapse in the US sub-prime housing market.

AIG was such a huge firm that foreign governments from Europe to the Middle East and Latin America were phoning the White House to plead with the Bush administration to stop AIG from going out of business, in case their own economies were ruined.

The US government answered the calls by bailing out the big insurance company - and paying off, in full, the companies that AIG insured. 

Now, twelve months on and $150bn dollars of federal cash later to help AIG, a new report says the US federal authorities were too swift to pay back in full the big Wall Street banks who were insured against a collapse in the housing market through AIG.