AIG discloses counterparties

AIG has bowed to public pressure and disclosed its largest counterparties. Full list here.

The loudest (and most self-righteous) critics will probably be surprised by a couple things. First, $12.1 billion went to states and municipalities.

Second, like I said, a huge chunk of the bailout money ($43.7 billion) went to counterparties in AIG's securities lending program (i.e., its repo desk). These aren't counterparties that made "bad bets" on mortgage-related securities; these are the counterparties that were providing AIG with the day-to-day cash it needs to run its operations.

Finally — and I can't emphasize this enough — this list says nothing about each bank's exposure to AIG. We have no idea how well hedged each bank was. (Goldman has said repeatedly that it hedged its exposure to AIG.) It's plainly inaccurate to say that we "saved" SocGen, Barclays, Goldman, etc., just because AIG used bailout money to post collateral on trades with those banks. A bank that was well hedged would have made money even if AIG failed — it might have bought CDS protection on AIG, for example. So just because AIG paid $11 billion of bailout money to SocGen does not mean that SocGen had $11 billion of exposure to AIG.