The former chief executive officer of American International Group's Financial Products Division said the collateralized debt obligations that undermined the company's financial foundation and prompted a massive government bailout should not have caused the losses they did.
In written testimony before the federally-appointed Financial Crisis Inquiry Commission, Joseph J. Cassano, former CEO of AIG's Financial Products unit, said CDOs–securities backed by mortgages, many of them of the subprime variety–that were covered with AIG credit-default swaps were thoroughly reviewed and analyzed.
"I did not expect actual, economic losses on the portfolio," he told the commission last week. "That said, I was truthful at all times about the unrealized accounting losses, and did my very best to estimate them accurately."
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