AIG Bailout Has Failed: Greenberg

Government should focus on reducing stake, restructuring firm, former CEO says
By Nick McMaster,  Newser Staff
Posted Apr 2, 2009 12:39 PM CDT
House Oversight Committee member Rep. Paul Kanjorski, D-Pa. questions former AIG head Hank Greenberg, on Capitol Hill in Washington, Thursday, April 2, 2009, during the committee's hearing.   (AP Photo/Gerald Herbert)
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(Newser) – AIG’s former CEO told Congress today the bailout of the insurance firm has “failed” and that the government should restructure the company, the Wall Street Journal reports. At a House committee hearing, Hank Greenberg said he blamed his successors for the firm’s implosion: "I think they got greedy. I think they wrote considerably more business than they should have."

Greenberg brought Congress a 10-point plan for fixing AIG, focusing on splitting off the financial products division—the source of the “toxic assets” that have bedeviled the firm—from AIG proper and reducing taxpayers’ stake in the firm to a target of 15%. Efforts to liquidate should be abandoned because “fire-sale prices will bring taxpayers, who now own almost 80% of AIG, only pennies on the dollar for their investment,” Greenberg argued.