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Former AIG boss blames Goldman for its collapse

City A.M. Reporter
The former head of American International Group is urging a closer look at the actions of Goldman Sachs, claiming the investment bank contributed to the insurer’s near-collapse, the Wall Street Journal reported this weekend.

Maurice “Hank” Greenberg, former chief executive of AIG, said in an interview he believed not enough attention was being paid to the role Goldman Sachs played in the subprime meltdown.
“Well, it certainly wouldn’t be difficult to come to that conclusion,” Greenberg said.

Goldman Sachs shot back at Greenberg, who based some of his accusations on articles in the New York Times, the Washington Post and other news outlets.

“Anyone, including Mr Greenberg, who relies on news reports rather than facts to form an opinion, particularly of a complicated subject, has a very high probability of reaching the wrong conclusion,” a spokesman said.

AIG had to be propped up with some $180bn in taxpayer support after it nearly collapsed in September 2008. The US government now owns nearly 80 per cent of the company, once the world’s largest insurer by market value.

The government stepped in to rescue AIG after it ran short of funds to meet collateral demands from banks that had paid for credit protection.