AIG

warning: Creating default object from empty value in /homepages/42/d192712403/htdocs/website/arthur/life/modules/taxonomy/taxonomy.pages.inc on line 33.

Why are we still not regulating credit default swaps?

In the news this weekend, among many other (some related) topics, has been AIG's revelation that much of the "bailout" money they received from the US government has gone to a small collection of banks, foreign and domestic. I am no expert on the various derivative contracts at issue - nor apparently are most of the financial press. However two rather interesting, perhaps disturbing, issues occur to me from reading the actual statements involved:

  • These don't appear to be actually payments to the banks in question, but rather "collateral postings" by AIG, at the request of the banks.
  • These contracts were purchased after the date of the initial government rescue in September 2008!
Syndicate content