An example: Major French and German banks were among the biggest beneficiaries of the U.S. rescue of American International Group Inc., yet the American government shouldered the entire $70 billion risk of pumping capital into the crippled insurance titan. The report compares that with the $35 billion that France spent on its overall financial rescue program and the $133 billion that Germany spent.
Much of the $182 billion in federal aid to AIG - the biggest of the government rescues - went to meet the company's obligations to its Wall Street trading partners on credit default swaps, a form of insurance against default of securities. The partners included French banks Societe Generale, which received $11.9 billion in AIG money
, and BNP Paribas, which got $4.9 billion, and Germany's Deutsche Bank, $11.8 billion
Of the 87 banks and financial entities that indirectly benefited from the U.S. aid to AIG, 43 are foreign, according to the report
. In addition to France and Germany, they include banks based in Canada, Britain and Switzerland.
In addition to AIG, many of the U.S. banks and automakers
that received billions in bailout aid derive a large proportion of their revenue from operations outside the U.S., the report noted
The watchdog panel was created by Congress to oversee the Treasury Department rescue program that came in at the peak of the financial crisis in the fall of 2008. It has said it's unclear whether U.S. taxpayers will ever fully recoup the cost of the AIG bailout. The Congressional Budget Office estimates that taxpayers will lose $36 billion
Although the law creating the U.S. rescue program called for Treasury to coordinate
its actions with similar efforts by foreign governments, "the global response to the financial crisis unfolded on an ... informal, country-by-country basis
," the new report says. "Each individual government made its own decisions based on its evaluation of what was best for its own banking sector and for its own domestic economy."
The U.S. program wound up injecting capital into around 700 banks, while all other governments combined
aided fewer than 50, according to the oversight panel.