The US Treasury has been accused of mishandling taxpayers money after a Congressional panel found that the $700bn bail-out of the banking industry at the height of the financial crisis helped foreign banks far more than overseas bail-outs helped American banks.
In the case of the bail-out of American International Group, the troubled insurer which nearly collapsed as a result of its exposure to the risky credit default swap market, the Congressional Oversight Panel on the TARP found that French and German banks were the biggest beneficiaries of the US government’s $70bn capital injection into AIG.
Banks including Societe Generale and Deutsche Bank benefited in part from $105bn of counter-party payments from AIG, payments which would not have been made had the US government not stumped up as much as $182.5bn in total federal aid to stabilise the insurer.
The TARP panel, chaired by Professor Elizabeth Warren, claimed that whereas the US government's financial rescue was more of a melting pot, other countries focused their efforts more narrowly.