The leadership of the Senate Banking Committee urged overseers of the Troubled Asset Relief Program (TARP) today to investigate why American International Group paid back investors in troubled AIG mortgage security offerings on a dollar-for-dollar basis even though the securities had not yet defaulted.
Sen. Chris Dodd, D-Conn., chairman of the panel, raised the issue at a hearing on insurance regulation today.
Mr. Dodd said he was very interested in determining why the counterparties to the AIG credit default swaps were paid 100 percent of the insurance AIG had provided to guarantee collateralized debt obligations.
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