AIG 'Was Going to Bring Down Europe': Lawmaker (Rep. Paul Kanjorski)

[sabra]

Source: CNBC

The U.S. government rescued giant insurer American International Group in part because its collapse would dramatically hurt European banks, a senior Democratic lawmaker said on Thursday.

The U.S. government has bailed out AIG three times since Sept. 16 and committed about $180 billion to keep the insurer alive and doing business.

"One of the reasons we had to rescue AIG was the fact that it was going to bring down Europe," Pennsylvania Rep. Paul Kanjorski told reporters after his subcommittee held a hearing on systemic risk.

Later, in an interview with Reuters, Kanjorski said he was told that a large number of AIG's counterparties were European.

"That's why we could not allow AIG to fail as we allowed Lehman (Brothers) to fail, because that would have precipitated the failure of the European banking system," he said.

Read more: http://www.cnbc.com/id/29542948

[UpInArms]

1. well, that's terrific news!

now we'll just sink the American banking system

[Mojorabbit]

10. Well if the european banks tanked

ours would have surely followed in the panic.

[depakid]

18. Not that the ethnocentric Americans posting here seem to care

[marketcrazy1]

2. so THATS where our money went

to euro banks!!! NICE!!!!!!

[MercutioATC]

3. Well, it's a good thing we avoided THAT!

As bad as things are here, Europe is worse off than we are..."saving" Europe obviously didn't work.

[Renew Deal]

4. I don't hear anyone talking about actually fixing this.

I hear about the damage and the losses, but when is the system going to be fixed? AIG should be broken to bits.

[neverforget]

5. And now we know why they are "too big to fail"

to big to fail = to big to exist

[Downwinder]

7. Proof that "Big is not necessarily better" n/t

[aquart]

9. Which is why it needs to be carefully and completely dismantled.

And ALL its executives fired.

[maxsolomon]

6. as i said in the dupe thread:

are the yurupein countries who's greedy bankers profited from this shite contributing to AIG's prop-up or is it our job to take care of them, also? i'm looking at you, France & England.

everybody needs to pitch in - we're not the planet's sugar daddy.

[aquart]

8. And Europe's responsibility here was ....?

Sorry, I'm still not getting why we're supposed to support that bottomless pit of incompetence.

[mbperrin]

13. Yes, last I recall, there were governments in Europe that I gather are

beholden to their citizens. I don't recall our President taking an oath to uphold the economy of Europe.

And I'm a good listener.

[readmoreoften]

38. Too bad Europeans don't get to vote for the US politicians who fuck up the global economy

in the first place.

They didn't vote for politicians who appointed the repeal of the Glass Steagall Act (which happened under Clinton and was pushed through by Obama's appointee Summers) or any of the other deregulation that caused this crisis. Banking is a global economic system. That's how it goes. Our banks fucked their banks. We're the ones that don't have nationalized banking. Take it up with the free-marketers.

[PDJane]

11. If you make the mess,

you are honour bound to at least try to fix the problem.

[Romulox]

12. Now we mortgaging our young people's futures--to prevent wealthy Europeans from losing money???

This country is disgusting. :puke:

[No Elephants]

30. Please name a better country, over all.

[stillcool]

14. I thought they were bailing out..

banks too. Why is the United States alone responsible for multi-national institutions/corporations? They have no allegiance to this country...obviously.

[FarCenter]

15. Actual European banks, or just United Kingdom banks?

AIG Financial Products did most of its business in London.

Would it's collapse have brought down Eurozone banks, or just the British banks?

I'd bet that this mostly rescues the City of London and the Pound Sterling.

[amandabeech]

23. European, not just Eurozone. The Swiss are in trouble.

Austria also lent to a lot of former Hapsburg lands in Euros. Those economies are in the tank and no one can afford to pay them off in Euros. The Polish zloty is on life support, for example.

[Sultana]

16. Why are we saving Europe...again?

If we crash would they save us?

I say let AIG fail....the shit bank is too big.

[aquart]

17. Did it also have WMD?

[No Elephants]

19. AIG is one of the best argument for restoring pre-Reagan limits on monopolies, mergers, etc. "Too

big to fail" is not a spurious argument, so let's not let them get too big to fail anymore. Especially if they control things like insurance of many other businesses (or our news).

Maybe we even need international anti-trust laws.

Where is Teddy Roosevelt when you need him?

[defendandprotect]

26. "If they're 'too big to fail' . . . they're too big." Anti-trust laws are sitll on the books. . .

simply haven't been enforced --- !!!

Unregulated capitalism is merely organized crime!

[No Elephants]

32. No. the merger and acquisition regulations DEFINITELY changed under Reagan. The probably

did under the Bushes, too, but I haven't checked on that yet.

[defendandprotect]

34. OK . . . well, go back to reinstate the New Deal regulations -- but REREGULATE ...!!!

and end monopolies --- reinstate anti-trust laws.

[Joanne98]

20. Goldman Sachs was the biggest counter-party. He forgot to mention that.

:sarcasm:

[JCMach1]

21. Since much of this was done under the jurisdiction of British and Other European laws

they should have to feel some pain as well.

British banking laws were the break in the dyke that allowed a lot of this to happen... i.e. the derivatives and credit default swaps.

The U.S. should no longer allow foreign banks into the country, or American banks out.

[Bandit]

22. The precedent has been established now

Every time AIG wants more billions all they have to do is scare Congress and billions will be granted. The US Treasury is being annihilated and We the People will not be helped one iota.

[amandabeech]

24. The Germans have refused a to cooperate in a general European bailout.

They will consider a case by case approach.

They wanted European reunification badly, and now I think that they should step forward. To paraphrase Sec. Colin Powell, "You break it, you buy it."

[defendandprotect]

25. Nader was just pointing this out --- why aren't European governments helping bail out AIG...???

and other "American" corporations which have these same involvements???

Obama should be making sure that he gets European help -- financial help!

[Dirk_H]

33. world is bailing out USA for decades

Don't you realize, that Europe (and China, Japan, etc.) are already "bailing out" America for decades. Who do you think, borrows America all that money, it needs to maintain the "American way of Life" and to play its role as (military) "superpower" everywhere in the world?
Savers and taxpayers all over the world are loosing money and have to pay for American financial irresponsibility (not to tell it fair swindle).

[defendandprotect]

37. Much of that also comes from borrowing from Social Security . . .

which has covered the war expenses and tax cuts for the wealthy!

The surplus has regularly been over $100 billion a year --- probably more now.

Engineered and manipulated by increase FICA costs on middle class and poor --

transferring the burden of taxation on their shoulders -- and those corrupt

practices were INCREASED by Greenberg to create a larger slush fund for Poppy --

that after Poppy's suggestion that they should send IRS out after poor to raise

more money!!!

[BelgianMadCow]

27. I am soo not commenting on this thread

a bit disgusted I am

[Dirk_H]

28. Should a deptor threaten his creditor?

Only to put some things into the right perspective (since these facts seem to be broadly ignored in the US):
The main reason, why the entire world is in the current financial (and increasingly also economical) mess, is the fact,
that the USA (and this means the entire society: government, companies, households) ran up tremendous depts against other parts of the world (mainly China, Japan, Europe, Saudi Arabia) and has now difficulties to serve these depts, especially the mortgage and security backed part. Lenders from all parts of the world had already to take big losses due to the Lehmann crash and the subsequent worldwide banking crisis. If other big american deptors (like AIG, Citigroup or even worse, Fannie and Freddy) would crash (and subsequently drag down their foreign creditors) this would be considered as a kind of national bankruptcy and it could become impossible for the USA to finance their gigantic deficits. If a creditor has "enough" dept (and the USA has way more than "enough"), he can of course bring his bank into trouble (or even into ruin), but would this be prudent, if he desperately needs much more credit?

[Mr. Hyde]

29. As long as we're talking about who owes who money, let's not forget, there's still the matter of WW1

loans that have never been paid back to America...by Europe. I'm pretty sure we could use that money right about now...adjusted for inflation of course.

[Dirk_H]

31. Primarily, America is causer, not victim of the crisis!

What really annoys me, is the widespread american delusion of being the worlds paymaster that has to "bailout" the rest of the world.
The exact opposite is the ugly truth. For decades the rest of the world has been paying for America celebrating a party, it can't afford. America absorbs half of the worlds savings, wasting the most of it for consumption. Even now, as it becomes more and more evident, that the worlds savers have to write off major parts of their american assets, Americans pretend to be victims, not causers, of the finacial crisis.

[dysfunctional press]

35. hasn't anyone in the government ever played 'risk'?

the board game?

[crimsonblue]

36. couldn't we have let Europe buy AIG?

just a thought.

[bklyncowgirl]

39. Does anyone else envision AIG as a banker wearing a suicide vest

Pony up Uncle Sam, or I'll pull the trigger and bring down the entire world!