Because of there being no data on where the money was going and a general attitude of pumping as much money into the banks as quickly as possible, billions of US bailout money wound up in the coffers of foreign financial firms, a watchdog panel chaired by Elizabeth Warren - Warren for CFPA head! - found. 43 of the 87 banks that benefited as a result of the of the AIG bailout were foreign.
AP:
An example: Major French and German banks were among the biggest beneficiaries of the U.S. rescue of American International Group Inc., yet the American government shouldered the entire $70 billion risk of pumping capital into the crippled insurance titan. The report compares that with the $35 billion that France spent on its overall financial rescue program and the $133 billion that Germany spent.
Much of the $182 billion in federal aid to AIG - the biggest of the government rescues - went to meet the company's obligations to its Wall Street trading partners on credit default swaps, a form of insurance against default of securities. The partners included French banks Societe Generale, which received $11.9 billion in AIG money, and BNP Paribas, which got $4.9 billion, and Germany's Deutsche Bank, $11.8 billion.In contrast, other countries that had government bailouts focused in a very limited fashion on banks that did not have substantial overseas operations. If the US had had more info on which foreign banks would reap the most rewards, we could have asked them to bear some of the burden, concluded the panel.
A Treasury spokesman said the reported showed, "that Treasury worked effectively with its overseas partners in a number of ways to address the global financial crisis."
Watchdog panel cites global impact of US bailout [AP] (Thanks to Michael!)
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