The Federal Reserve’s decision to extend credit to AIG has been defended by the central bank’s Chairman, The Wall Street Journal reports. The Fed will back a full review of its actions by federal government regulators, said Ben Bernanke.
The Fed will support a full review by the U.S. Government Accountability Office and provide all records and personnel necessary to carry out the review, added Bernanke. The Fed agreed to offer over $180 billion of aid to the insurer to prevent “potentially calamitous effects on the U.S. economy” if AIG had failed.
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