NU Online News Service, June 30, 3:00 p.m. EDT

Requirements tied to American International Group's bailout could prevent the company from recovering money from financial institutions such as Goldman Sachs that may have purposely steered AIG toward insuring bad mortgage deals, according to a New York Times story.

In a lengthy, yet comprehensive piece, The New York Times reported that documents the paper reviewed "indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their AIG deals and instead paid the banks in full for the contracts."

It further states that as part of the government rescue of the company, "AIG was required to forfeit its right to sue several banks–including Goldman, Soci?t? G?n?rale, Deutsche Bank and Merrill Lynch–over any irregularities with most of the mortgage securities it insured in the pre-crisis years."

The story also quotes sources debating to what extent–or whether–federal officials were looking at the AIG bailout from the perspective of the banks rather than the economy as a whole.

For the full report, and much more information, see The New York Times story In U.S. Bailout of A.I.G., Forgiveness for Big Banks.

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AIG Bailout: For The Benefit Of Banks Or The Economy?

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