The near-failure on September 16, 2008, of American International Group (AIG) was an iconic moment in the financial crisis. The decision to rescue AIG was controversial at the time and remains so. Large bets on real estate pushed AIG to the brink of bankruptcy. In one case, AIG used securities...

Recent trends in the leveraged loan market towards weaker creditor protection have raised concerns regarding the credit risk of loans originated and then sold to Collateralized Loan Obligations (''CLOs''). Relaxed due diligence on the part of CLO managers in the acquisition and sale of leveraged...