Credit default swaps not covered by TARP start to pay out
Banks have paid AIG as much as $3bn in the past quarter as the upturn makes some credit default swaps (CDS) valuable, the Wall Street Journal reports. Goldman Sachs has paid $1bn.
Credit default swaps for mortgage backed securities were what brought down AIG. Many were taken over by the US government as part of its troubled assets relief programme (TARP). But AIG retained some, which are now paying out.
Reuters said neither AIG nor Goldman would comment on the WSJ report.
