Goldman Sachs denies pushing AIG over the edge with collateral demands
GOLDMAN Sachs officials insisted demands for billions of dollars from insurer AIG ahead of a $182bn government rescue package were based on legitimate market prices and denied gaming values for a massive payout.
Members of the Financial Crisis Inquiry Commission peppered Goldman witnesses with questions yesterfday about their aggressive demands for collateral from AIG and why the market values triggering those demands were often lower than others.
The issue revives a debate about the accuracy of mark-to-market accounting during the financial crisis and whether Goldman got a backdoor bailout from taxpayer support for American International Group.
Commission chairman Phil Angelides, stopping just short of bald accusations, pressed
Goldman officials on whether the firm was deliberately driving down prices for its own
gain. “Are you then creating a self-fulfilling prophesy?” he asked.
“We never instruct people to mark these down,” Goldman chief financial officer David Viniar told the panel on its second day of looking into the role of derivatives in the financial crisis.
He also denied Goldman got a special benefit from the AIG bailout. “It is not true,” said Viniar.