Former Federal Reserve Chairman Ben Bernanke said that the government had no choice but to bail out the American International Group of $182 billion. Its demise would’ve created a similar economic collapse that occurred when the Lehman Brothers went bankrupt in September 2008.
Bernanke said that AIG took risks with unregulated products like a hedge fund while using cash from people’s insurance policies.
Fortunately, the long-term cost of the bailout was much less than the initial payout. Taxpayers made a $23 billion profit when the Treasury sold its last shares of the insurance giant.
The Balance