Here is a summary of Fed Chairman Bernanke's testimony before the Senate Budget Committee this morning. Here is a passage on AIG:
I think the whole country is angry with AIG.
“Mr. Chairman,” Senator Ron Wyden, Democrat of Oregon, asked at the outset, “at what point will the taxpayer no longer be on the hook for the massive A.I.G. failure? What is the end game for American taxpayers?”
Mr. Bernanke replied that nothing had made him more angry during the months of the sprawling financial crisis than the episode involving the insurance giant that has reported astronomical losses and has been given financial lifelines worth billions of dollars.
“A.I.G. exploited a huge gap in the regulatory system,” Mr. Bernanke said. “There was no oversight of the financial products division. This was a hedge fund, basically, that was attached to a large and stable insurance company.” And this quasi-hedge fund, Mr. Bernanke went on, to nobody’s surprise, made irresponsible bets and took huge losses.“We had no choice but to try to stabilize the system because of the implications that the failure would have had for the broad economic system,” he said.