Wednesday, March 18, 2009

WASHINGTON (AP) - The federal agency that oversaw American International Group says its criticism of the company’s corporate governance grew increasingly severe over the past four years. But the Office of Thrift Supervision says it also failed to recognize the susceptibility of the company’s complex financial instruments.

The agency’s acting director, Scott Polakoff, said in prepared testimony to a House panel that no one predicted the amount of money AIG would need to meet the demands of the unregulated credit default swaps that it engaged in.

AIG has received more than $170 billion in federal aid to keep it from foundering.

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