Topic: Counterparties

Ben Bernanke defends the AIG bailout, arguing that allowing the firm to fail would have caused systemic damage to the US economy. Senator Chris Dodd questions why the Federal Reserve paid AIG's counterparties, including many foreign banks and Goldman Sachs, 100 cents on the dollar without negotiating discounts or "haircuts."

The Associated Press reported on Britney Spears visiting sick children and donating to a clown program, which is characterized as a distraction from serious financial news. In the banking sector, the Treasury and the Fed refuse to name the "counterparties" receiving AIG bailout funds, claiming such transparency could destroy those entities.