Outrage over bailed-out insurance giant American International Group's million-dollar bonuses may grab headlines, but its payouts on complicated financial instruments deserve closer examination, ex-New York Gov. Eliot Spitzer said Thursday.
In his first television interview since being forced from office in a prostitution scandal, Spitzer told CNN's "Fareed Zakaria GPS" that the insurer was at the "center of the web" of transactions that have forced a massive bailout of the U.S. financial system.
AIG is now being kept afloat by U.S. taxpayers, and Spitzer said its woes stem from financial practices he first investigated as New York's attorney general.
"Back then I said to people, 'AIG is the center of the web.' The financial tentacles of this company stretched to every major investment bank," he said. Watch Spitzer say AIG has larger problems
AIG's collapse stemmed largely from its array of exotic financial products such as credit-default swaps, which went sour when the U.S. housing market turned south after 2006. Read full article »