NU Online News Service, Nov. 17, 12:54 p.m. EST
WASHINGTON–Federal Reserve officials woefully underestimated the potential cost of bailing out American International Group, according to a report issued by the Office of the Special Inspector General for the Troubled Asset Relief Program.
Because of that, and also because it acted more as a creditor than a regulator in stabilizing AIG in September 2008, the Fed wound up paying more than it should have to close out the collateralized debt obligations underlying AIG's huge loss-riddled credit default swap portfolio.
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