NU Online News Service, Nov. 17, 12:54 p.m.EST

WASHINGTON–Federal Reserve officials woefullyunderestimated the potential cost of bailing out AmericanInternational Group, according to a report issued by the Office ofthe Special Inspector General for the Troubled Asset ReliefProgram.

Because of that, and also because it acted more as a creditorthan a regulator in stabilizing AIG in September 2008, the Fedwound up paying more than it should have to close out thecollateralized debt obligations underlying AIG's huge loss-riddledcredit default swap portfolio.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.