Watchdog: Foreign financial firms received $14B through AIG bailout

by Silla Brush - 08/12/10 4:04 AM ET

Foreign-based financial firms received roughly $14 billion in U.S. taxpayer bailout aid stemming from complex derivatives deals involving Goldman Sachs and American International Group (AIG), a government watchdog said Thursday.

The Congressional Oversight Panel for the $700 billion bailout package said that the taxpayer bailout of AIG benefited Goldman, which in turn benefited foreign-based firms that did business with Goldman.

“Taxpayer aid to AIG became aid to Goldman, and aid to Goldman became aid to a number of domestic and foreign investors,” the panel said in a report. “In some cases the aid was in the form of repayment in full of obligations that, without government help, could have ended in default. In other cases, the aid was in the form of guarantees that other parties did not have to pay because the government prevented any default.”

All but one of the 32 so-called “second-level counterparties” to the derivatives deals with Goldman were foreign-based financial firms. According to a June report from the panel, Goldman considered itself a “market intermediary.” The panel said the 31 financial institutions received a total of $13.98 billion.

Here is the full list of 32 firms and the amount from the bailout that they received in millions of dollars, according to the panel:

DZ Bank AG Deutsche Zentrale Genossenschafts Bank: $2,504

Banco Santander Central Hispano SA: $1,544

Rabobank Nederland-London Branch: $852

ZurcherKantonalbank: $998

Dexia Bank SA: $865

BGI INV FDS GSI AG: $633

Calyon-Cedex Branch: $663

The Hongkong & Shanghai Banking Corporation: $631

Depfa Bank Plc: $692

Skandinaviska Enskilda Bankensweden: $365

Sierra finance plc: $322