How Did Goldman Cause The Collapse Of Aig?

203 Words1 Page
Goldman was accused of causing the collapse of AIG. Goldman’s agreement with AIG allowed to call on collateral payments under two conditions, “First, if AIG lost its AAA credit rating and second, if Goldman believed the value of the underlying securities being insured had fallen.” (Cohan, 2011, p. 1) On July 27th, 2007 was the start of dispute between Goldman and AIG about the valuation of collateral CDO. According to Joseph Cassano CEO of AIG, Goldman “was having a hard time getting the numbers themselves. Goldman called for $1.8 billion in July 27, 2007, and then reduced the value several times to $450 million in two weeks.” (Cohan, 2011, p. 1) However, Goldman premature action call which based on its excessively low valuation triggered

    More about How Did Goldman Cause The Collapse Of Aig?

      Open Document