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Text size [+][-]  Monday September 6 2010GLOBAL EDITION

Considered view
15 Mar 2009 19:49

Name and shame

Context News

The US government clashed with American International Group over some $165m in 2008 bonus payments that the insurer said it is legally bound to pay to staff at its financial products unit by March 15.

According to the New York Times, Treasury boss Timothy Geithner got AIG to slice some $10m off the payments going to top executives and linked the remainder to performance.

Larry Summers, the US president's chief economic adviser, told ABC that the AIG fiasco is the "most outrageous" thing to have occurred in the financial crisis.

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Paying $165m in guarantees to employees involved in making AIG a ward of the US government is disgraceful. But the commitments appear binding. Still, the government can name and shame to mitigate the pain, modify behaviour and avoid a firestorm that does more damage than good.

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