Boston Federal Reserve President Eric Rosengren said the U.S. Government should have seized American International Group instead of bailing it out, the Boston Herald reports. “I believe AIG’s failure could well have caused cascading failures of many financial institutions, reminiscent of the Great Depression,” Rosengren told the Massachusetts Newspaper Publishers Association Dec. 3 “This would have further frozen credit creation, and the end result would likely have been an even higher-believe much higher-national unemployment rate than the very high rate we see now.” The government has propped up AIG with some $180 billion in loans over the past year, fearing the insurance giant’s collapse would have spawned a global economic meltdown. Rosengren said he would have preferred a straight government takeover of the firm.
Boston Fed Chief Prefers AIG Takeover
Boston Federal Reserve President said the government not have bailed out AIG
December 4, 2009