经贸专业英语报刊阅读教程 第八课 unit 8 How AIG Became Too Big to Fail.docx

经贸专业英语报刊阅读教程 第八课 unit 8 How AIG Became Too Big to Fail.docx

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经贸专业英语报刊阅读教程第八课unit8HowAIGBecameTooBigtoFail

HowAIGBecameTooBigtoFail

TreasurySecretaryTimGeithnerhadeveryreasontothinkhehadseenallofAIG'sdirtylaundry.Thegovernmentowned80%ofthecompany,andGeithnerhadjustorchestratedAIG'smostrecenthandout—itsfourth,ifyouarekeepingscore,for$30billiononMarch2—topreventtheteeteringinsurancegiantfromgoingoverthecliffandtakingtherestoftheglobalfinancialsystemwithit.AIGhadalreadycostthetaxpayerssome$170billion,mostlytorepairthedamagedonebyoneofitsunits,AIGFinancialProducts（AIGFP）,whichlastyearalonepiledup$40billioninlossesrelatedtoitsdealingsincomplexmortgagebondderivatives.

ThenGeithner'sstaffmadethediscoverythatwouldinfuriatenearlyeveryoneinWashington.OnMarch10,theSecretarylearned,10daysafterhisstafffirstgotwindofit,thatAIGhadpaidout$165millioninretentionbonusestoexecutivesattheunitthatcompelledtheU.S.tobailoutthecompanyinthefirstplace.IttookGeithneruntil7:

40thenextnighttoplacewhatmusthavebeenatensephonecalltoAIG'snewishCEO,EdLiddy.Thebonuseswerenottenable;theyhadtobecanceled,hedemanded.Liddy,adollar-a-yearmanwhotookoverthecompanyafterthebonuseshadbeenpromised,repliedthatAIG'slawyershaddecidedthatthecontractscouldnotbebrokenwithoutevenbiggercoststotaxpayers.GeithnersentTreasury'slawyerssearchingforawayout,buttheycouldn'tfindone.（See25peopletoblameforthefinancialcrisis.）

Onthebalancesheetofdebaclescausedbythiseconomiccrisis—the$700billionTroubledAssetReliefProgram（TARP）,thestock-marketswoon,thecreditcrunchandtheongoingglobalrecession—$165millionissmallchange.ButtherevelationsoftheAIGbonuses,likenothingelse,seemedtofinallytipthemountingpublicfurorovercorporatemalpracticeintoafull-scalerebellion.YetGeithner,embarrassedfordiscoveringthebonusessolate,planstodockAIGthatmuchoutofthenext$30billioninbailoutfundingwhenitisdelivered—whichamountstoamere0.1%ofthetotalAIGhasreceived.AssortedSenators,fromNewYorkDemocratChuckSchumertoMontanaDemocratMaxBaucusandIowaRepublicanChuckGrassley,haveproposedanumberoftaxandlegalschemestosnatchbackthebonusbucksfromAIGFPexecutives—73ofwhomgotpayoutsof$1millionormore,accordingtoNewYorkStateattorneygeneralAndrewCuomo.（Read"TreasuryLearnedofAIGBonusesEarlierThanClaimed."）

Withallthepoliticaltheaterandpopulistgrandstanding,though,thebiggerissuehasbeenobscured.Andthatis,JustwhatisAIGdoingwiththe$170billion?

Doesthecompany'sstrategy,whichistowinddownitsexposuretotoxicassetsandsellsomeofitsprofitableinsurancedivisionstohelppayoffthegovernmentdebt,standagoodchanceofsucceeding?

Andifitdoes,willtheworldavertfinancialArmageddon?

Thosequestionshavetakenongreaterurgency,sinceitturnsoutthatAIGhasbecomethebankingindustry'sATM,essentiallypassingalong$52billionofTARPmoneytoanarrayofU.S.andforeignfinancialinstitutions—fromGoldmanSachstoSwitzerland'sUBS.Thosefirmswerecounterpartiestothecredit-defaultswaps（CDSs）thatAIGFPsoldatleastthrough2005,andthecompanieswerecollectingontheinsurance-likederivatives.AIGpaidoutanadditional$43.7billiontomanyofthesamebanks,whichwerealsocustomersofthesecurities-lendingoperationrunoutofAIG'sinsurancedivision.Inthiscase,AIGmanagedtotakeabusinessspecificallydesignedtobelowrisk,lowreturnandampitintoanotherdiceyventure—withtaxpayersonthehook.

Theoutragewillpass,andwhenitdoes,we'regoingtohavetofocusonwhetherkeepingAIGafloatispreventingasharprecessionfrombecomingaprolongedone.ThereasonAIGhascosttaxpayers$170billion—andthereasontheObamaAdministrationseemedwilling,atleastatfirst,toholditsnoseandaccedetobonusesforthecompany'smanagers—isthatit'stoobigtofail.It'sanoftenheardphrase,butwhatdoesitreallymean?

（Seethetop10financialcollapsesof2008.）

TheideaisthatinaglobaleconomysotightlylinkedthatproblemsintheU.S.realestatemarketcanhelpbringdownIcelandicbanksandAsianmanufacturers,AIGsitsatsomeofthecriticalswitchpoints.Itsfailure,sothefeargoes,wouldsetoffchainsofothers,rattlingaroundtheglobeinshortorder.Althoughsomecriticssaythefearisoverblownandtheworldeconomycouldabsorbtheblow,nooneseemsparticularlykeenontestingthatapproach.

HowWeGotHere

AIGseemsanunlikelycandidateforthecompanythatcouldbankrupttheplanet.Founded90yearsagoinShanghai,AIGmoveditsheadquarterstoNewYorkCityastheworldheadedtowardwarin1939.AfterMauriceR.（Hank）Greenbergtookoverin1967,AIGconsolidateditsglobalempire.BythetimeGreenbergwasforcedoutinanaccountingscandal38yearslater,AIGhadbecomeoneoftheworld'sbiggestpubliccompanies,withsalesof$113billionin2006and116,000employeesin130countries,fromFrancetoChina.

AIGsaysithaswrittenmorethan81millionlife-insurancepolicies,withafacevalueof$1.9trillion.Itcoversroughly180,000smallbusinessesandothercorporateentities,whichemployapproximately106millionpeople.ThatmakesAIGAmerica'slargestlifeandhealthinsurer;secondlargestinpropertyandcasualty.Throughitsaircraft-leasingsubsidiary,AIGownsmorethan950airlinejets.Justforgoodmeasure,AIGisahugeproviderofinsurancetoU.S.municipalities,pensionfundsandotherpublicandprivatebodiesthroughguaranteedinvestmentcontractsandotherproductsthatprotectparticipantsin401（k）plans."Wehavenochoicebuttostabilize[it]orelseriskenormousimpact,notjustinthefinancialsystembutonthewholeU.S.economy,"saidFedChairmanBenBernanke.

Theriskisnotinanyonebusinessbutintheconnectionsamongthemandintheindustriesinwhichtheycompete.AsAIGhaspointedoutinitsownanalysis,"TheextentandinterconnectednessofAIG'sbusinessisfar-reachingandencompassescustomersacrossthegloberangingfromgovernmentalagencies,corporationsandconsumerstocounterparties.AfailureofAIGcouldcreateachainreactionofenormousproportion."Amongothereffects,itcouldleadtomassredemptionsofinsurancepolicies,whichwouldtheoreticallydestabilizetheindustry;thewithdrawalof$12billionto$15billioninU.S.consumerlendinginacredit-shortuniverse;andevendamageairframemakerBoeingandjet-enginemakerGE,sinceAIG'saircraft-leasingunitbuysmorejetsthananyoneelse.

WhileAIG'sholdingsarediverse,nearlyallitslossescenteredonAIGFP,whichuntilMarch2008wasledbyitshigh-rollingpresident,JosephCassano,atough-talkingBrooklyn,N.Y.,nativewhointhepasteightyearsbanked$280millionincashcompensation,orexactly$115millionmorethanthebonusesatthecenterofthecurrentcontroversy.Cassano,whohelpedfoundtheAIGFPunitin1987,builthismoneymachinenotonanythingfraudulentbutonwhat'sbeendescribedasregulatoryarbitrage.AsBernankeexplainedrecently,"AIGexploitedahugegapintheregulatorysystem.TherewasnooversightoftheFinancialProductsdivision.Thiswasahedgefund,basically,thatwasattachedtoalargeandstableinsurancecompany."

HowAIGBecameTooBigtoFail  

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 发布时间:

2009-03-21类型:

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TreasurySecretaryTimGeithnerhadeveryreasontothinkhehadseenallofAIG'sdirtylaundry.Thegovernmentowned80%ofthecompany,andGeithnerhadjustorchestratedAIG'smostrecenthandout—itsfourth,ifyouarekeepingscore,for$30billiononMarch2—topreventtheteeteringinsurancegiantfromgoingoverthecliffandtakingtherestoftheglobalfinancialsystemwithit.AIGhadalreadycostthetaxpayerssome$170billion,mostlytorepairthedamagedonebyoneofitsunits,AIGFinancialProducts（AIGFP）,whichlastyearalonepiledup$40billioninlossesrelatedtoitsdealingsincomplexmortgagebondderivatives.

ThenGeithner'sstaffmadethediscoverythatwouldinfuriatenearlyeveryoneinWashington.OnMarch10,theSecretarylearned,10daysafterhisstafffirstgotwindofit,thatAIGhadpaidout$165millioninretentionbonusestoexecutivesattheunitthatcompelledtheU.S.tobailoutthecompanyinthefirstplace.IttookGeithneruntil7:

40thenextnighttoplacewhatmusthavebeenatensephonecalltoAIG'snewishCEO,EdLiddy.Thebonuseswerenottenable;theyhadtobecanceled,hedemanded.Liddy,adollar-a-yearmanwhotookoverthecompanyafterthebonuseshadbeenpromised,repliedthatAIG'slawyershaddecidedthatthecontractscouldnotbebrokenwithoutevenbiggercoststotaxpayers.GeithnersentTreasury'slawyerssearchingforawayout,buttheycouldn'tfindone.

Onthebalancesheetofdebaclescausedbythiseconomiccrisis—the$700billionTroubledAssetReliefProgram（TARP）,thestock-marketswoon,thecreditcrunchandtheongoingglobalrecession—$165millionissmallchange.ButtherevelationsoftheAIGbonuses,likenothingelse,seemedtofinallytipthemountingpublicfurorovercorporatemalpracticeintoafull-scalerebellion.YetGeithner,embarrassedfordiscoveringthebonusessolate,planstodockAIGthatmuchoutofthenext$30billioninbailoutfundingwhenitisdelivered—whichamountstoamere0.1%ofthetotalAIGhasreceived.AssortedSenators,fromNewYorkDemocratChuckSchumertoMontanaDemocratMaxBaucusandIowaRepublicanChuckGrassley,haveproposeda