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| AIG boss acknowledges 'mistakes' | AIG boss acknowledges 'mistakes' |
| (10 minutes later) | |
| The chief executive of AIG has admitted that fundamental mistakes were made at the US insurance giant. | The chief executive of AIG has admitted that fundamental mistakes were made at the US insurance giant. |
| "Mistakes were made at AIG on a scale that few could have imagined possible," Edward Liddy will tell a Congressional hearing later on Wednesday. | "Mistakes were made at AIG on a scale that few could have imagined possible," Edward Liddy will tell a Congressional hearing later on Wednesday. |
| He will also admit that AIG is "too complex, too unwieldy and too opaque". | He will also admit that AIG is "too complex, too unwieldy and too opaque". |
| Mr Liddy also calls the $165m (£119m) bonuses paid by AIG "distasteful" after the insurer took about $170bn of aid from the US government. | Mr Liddy also calls the $165m (£119m) bonuses paid by AIG "distasteful" after the insurer took about $170bn of aid from the US government. |
| Mr Liddy is to appear in front of Congressional committee to answer questions about the bonuses and the plight of AIG. | |
| Before Mr Liddy appeared before the committee, members of the committee expressed their anger, not just at the bonuses paid to AIG executives, but also at the $170bn bail-out by the US government. | |
| One referred to a "tidal wave of rage" throughout the US, while another called the US taxpayer "the ultimate sucker" in the whole AIG saga. | |
| 'Outrage' | 'Outrage' |
| It was distasteful to have to make these payments Edward Liddy, AIG chief executive AIG: Company profile | It was distasteful to have to make these payments Edward Liddy, AIG chief executive AIG: Company profile |
| In a prepared testimony, Mr Liddy says the company "strayed from its core competencies in the insurance business". | |
| Nowhere was this more evident than in "the creation of what grew to become an internal hedge fund, which then became substantially overexposed to market risk," he adds. | Nowhere was this more evident than in "the creation of what grew to become an internal hedge fund, which then became substantially overexposed to market risk," he adds. |
| He also addresses the contentious issue of excessive bonuses. | He also addresses the contentious issue of excessive bonuses. |
| "I am mindful of the outrage of the American public and of the president's call for a more restrained compensation system," he says. | "I am mindful of the outrage of the American public and of the president's call for a more restrained compensation system," he says. |
| Mr Liddy said that he would never have approved the $165m bonuses if he had been chief executive at the time the contracts were signed. | Mr Liddy said that he would never have approved the $165m bonuses if he had been chief executive at the time the contracts were signed. |
| "It was distasteful to have to make these payments," he says. | "It was distasteful to have to make these payments," he says. |
| US President Barack Obama has expressed anger at the bonuses, calling the payments "an outrage". | US President Barack Obama has expressed anger at the bonuses, calling the payments "an outrage". |
| "It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said earlier this week. | "It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said earlier this week. |
| US Treasury Secretary Tim Geithner has since said that the government will deduct the bonuses from government funds due to be paid to the insurer. | US Treasury Secretary Tim Geithner has since said that the government will deduct the bonuses from government funds due to be paid to the insurer. |
| Mr Liddy, former chief executive of the Allstate insurance firm, took over at AIG in September, just days days after it was saved from bankruptcy with an $85bn lifeline from the government. | Mr Liddy, former chief executive of the Allstate insurance firm, took over at AIG in September, just days days after it was saved from bankruptcy with an $85bn lifeline from the government. |
| The government has since pumped billions more into the troubled insurer, which reported a loss of $61.7bn for the last three months of 2008 - the biggest quarterly loss in corporate history. | The government has since pumped billions more into the troubled insurer, which reported a loss of $61.7bn for the last three months of 2008 - the biggest quarterly loss in corporate history. |