Ex-chief of AIG de­riv­a­tives unit: Cor­ners not cut in risk buildup

Austin American-Statesman - - BUSINESS & PERSONAL FINANCE -

A for­mer top ex­ec­u­tive of in­surer Amer­i­can In­ter­na­tional Group Inc. said his di­vi­sion more than tripled the amount of risky in­vest­ments it in­sured in the three years lead­ing up to the 2008 fi­nan­cial melt­down.

But Joseph Cas­sano, chief ex­ec­u­tive for AIG’s key Fi­nan­cial Prod­ucts di­vi­sion, re­jected ac­cu­sa­tions from a spe­cial panel in­ves­ti­gat­ing the cri­sis that he re­laxed stan­dards to is­sue more credit de­fault swaps.

AIG re­ceived a $182 bil­lion tax­payer bailout — the biggest of the fed­eral res­cues — af­ter it nearly col­lapsed and helped trig­ger the fi­nan­cial cri­sis. Cas­sano, who was forced to re­tire in March 2008, said the fed­eral govern­ment paid too much to set­tle AIG’s debt and that the com­pany would have re­couped much of its in­vest­ments if those trades hadn’t been nul­li­fied dur­ing its bailout. “I think I would have ne­go­ti­ated a much bet­ter deal for the tax­payer than what the tax­payer got,” he said.

Joseph Cas­sano

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