Bernanke: AIG debacle the worst element of US financial crisis

Bernanke: AIG debacle the worst element of US financial crisis Washington - Federal Reserve Chairman Ben Bernanke on Tuesday slammed insurance giant American International Group Inc (AIG) for taking needless risks and helping bring the US financial system to its knees.

In testimony before Congress, Bernanke said AIG was critical to the stability of the wider financial system, but the central bank head made clear that he was uneasy about the government's nearly 200- billion-dollar investment in the world's largest insurance company.

"If there is a single episode (of the financial crisis) that has made me more angry, I can't think of one," Bernanke told the Senate Budget Committee.

AIG on Monday reported a 62-billion-dollar quarterly loss, the largest corporate loss in US history. That forced the government to inject another 30 billion dollars into the firm, on top of 150 billion dollars made available in three previous bail-outs since October.

Bernanke said AIG had exploited regulatory loopholes and taken "irresponsible" risks by insuring a massive amount of mortgage-backed securities, which have plummeted in value as housing prices collapsed in the United States. (dpa)

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