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| AIG chief asks for bonuses back | AIG chief asks for bonuses back |
| (20 minutes later) | |
| The boss of US insurer AIG has called the bonuses paid to executives "distasteful", but said he asked some recipients to return at least half. | The boss of US insurer AIG has called the bonuses paid to executives "distasteful", but said he asked some recipients to return at least half. |
| But Edward Liddy said the Federal Reserve knew of $165m (£119m) bonus payments to executives that have caused such a furore in US. | But Edward Liddy said the Federal Reserve knew of $165m (£119m) bonus payments to executives that have caused such a furore in US. |
| "Mistakes were made at AIG on a scale that few could have imagined possible," he told a Congressional hearing. | "Mistakes were made at AIG on a scale that few could have imagined possible," he told a Congressional hearing. |
| He also admitted that AIG is "too complex, too unwieldy and too opaque". | He also admitted that AIG is "too complex, too unwieldy and too opaque". |
| Mr Liddy said that he had asked AIG executives receiving more than a $100,000 bonus to pay at least half of it back. | |
| The insurer has taken about $170bn of aid from the US government, which is why the bonus payments have caused such outrage in the US. | |
| President Barack Obama has also reiterated his anger at the bonus payments. | President Barack Obama has also reiterated his anger at the bonus payments. |
| He referred to them as an "inappropriate use of taxpayer money". | He referred to them as an "inappropriate use of taxpayer money". |
| "Excess greed and excess compensation have made us all vulnerable," he added. | "Excess greed and excess compensation have made us all vulnerable," he added. |
| The president called for a new model for economic growth that does not rely on the financial sector. | The president called for a new model for economic growth that does not rely on the financial sector. |
| He also said that he and members of his economic council have begun discussions with lawmakers on legislation to create a new regulatory body to give the government more authority over financial institutions like AIG. | He also said that he and members of his economic council have begun discussions with lawmakers on legislation to create a new regulatory body to give the government more authority over financial institutions like AIG. |
| 'Wave of rage' | 'Wave of rage' |
| Mr Liddy is appearing in front of the Congressional committee to answer questions about the bonuses and the plight of AIG. | Mr Liddy is appearing in front of the 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. | 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. | 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. |
| AIG has recently made a set of compensation payments, some of which I find distasteful Edward Liddy, AIG chief executive AIG: Company profile | AIG has recently made a set of compensation payments, some of which I find distasteful Edward Liddy, AIG chief executive AIG: Company profile |
| Mr Liddy said the company "strayed from its core competencies in the insurance business". | Mr Liddy said 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 added. | 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 added. |
| Drastic action is now needed to claw back the massive losses that resulted from from these risks, Mr Liddy said. | Drastic action is now needed to claw back the massive losses that resulted from from these risks, Mr Liddy said. |
| Notes accompanying the written testimony said that the insurer will undertake a "massive restructuring that will effectively break up the company and unlock value to repay taxpayers." | Notes accompanying the written testimony said that the insurer will undertake a "massive restructuring that will effectively break up the company and unlock value to repay taxpayers." |
| Reports suggest that AIG is considering selling its New York headquarters and a nearby office block. | Reports suggest that AIG is considering selling its New York headquarters and a nearby office block. |
| Mr Liddy also addressed the contentious issue of excessive bonuses. | Mr Liddy also addressed the contentious issue of excessive bonuses. |
| "I am mindful of both of the environment in which we are operating and of the president's call for a more restrained compensation system," he said. | "I am mindful of both of the environment in which we are operating and of the president's call for a more restrained compensation system," he said. |
| Mr Liddy has said that he would not have approved the $165m bonuses if he had been chief executive at the time the contracts were signed. | Mr Liddy has said that he would not have approved the $165m bonuses if he had been chief executive at the time the contracts were signed. |
| "AIG has recently made a set of compensation payments, some of which I find distasteful," he said. | "AIG has recently made a set of compensation payments, some of which I find distasteful," he said. |
| Record loss | Record loss |
| Earlier this week, Barack Obama expressed anger at the bonuses, calling the payments "an outrage". | Earlier this week, Barack Obama 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. | "It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said. |
| 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. |