Goldman Sachs Under Pressure to Return $2.9 Billion Windfall to Taxpayers
Posted on Feb 16, 2011
Critics of the financial chop shop, of which there are many, would like to see Goldman Sachs return billions in taxpayer dollars paid out to cover a $20 million bet. The huge payout was passed through AIG, orchestrated by then-Chairman Timothy Geithner’s New York Fed, and publicized by the Financial Crisis Inquiry Commission.
It’s now clear that the Federal Reserve Bank of New York, which quarterbacked the hurried, $182 billion bailout of AIG to avoid a meltdown of global financial markets, did little to guard against windfalls for major banks and investment banks.
The financial crisis panel’s final report late last month found that Goldman’s $2.9 billion payout came on “proprietary” trades—investments in which the firm used its own money rather than the more typical deals completed on behalf of clients.