AIG in Hindsight
Robert L. McDonald, Anna Paulson
The near-failure on September 16, 2008, of American International Group (AIG) was an iconic moment in the financial crisis. Two large bets on real estate made with funding that was vulnerable to bank-run like behavior on the part of funders pushed AIG to the brink of bankruptcy. AIG used securities lending to transform insurance company assets into residential mortgage-backed securities and collateralized debt obligations, ultimately losing at least $21 billion and threatening the solvency of the life insurance companies. AIG also sold insurance on multi-sector collateralized debt obligations, backed by real estate assets, ultimately losing more than $30 billion. These activities were apparently motivated by a belief that AIG's real estate bets would not suffer defaults and were "money-good." We find that these securities have in fact suffered write-downs and that the stark "money-good" claim can be rejected. Ultimately, both liquidity and solvency were issues for AIG
Year of publication: |
April 2015
|
---|---|
Authors: | McDonald, Robert L. |
Other Persons: | Paulson, Anna (contributor) |
Institutions: | National Bureau of Economic Research (contributor) |
Publisher: |
Cambridge, Mass : National Bureau of Economic Research |
Subject: | Institutioneller Investor | Institutional investor | Finanzdienstleistung | Financial services | Versicherung | Insurance | Kreditderivat | Credit derivative | Finanzkrise | Financial crisis | Kreditrisiko | Credit risk | Anlageverhalten | Behavioural finance |
Saved in:
freely available
Extent: | 1 Online-Ressource |
---|---|
Series: | NBER working paper series ; no. w21108 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Mode of access: World Wide Web System requirements: Adobe [Acrobat] Reader required for PDF files Hardcopy version available to institutional subscribers. |
Other identifiers: | 10.3386/w21108 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012457558