According to the Congressional Oversight Panel paper, the US Treasury should have looked more closely into how the program's benefits would work overseas and used the information to collaborate with regulators in different nations, reports Bloomberg.
"France and Germany were among the greatest beneficiaries of AIG's rescue, yet the US government bore the entire $70 billion risk of the AIG capital injection program," the report said.
It added that the American share of this single rescue was larger than France's $35 billion program and around half the size of Germany's $133 billion capital injection funding.
Earlier this month, AIG warned that it may need to raise capital in order to meet the requirements of the Dodd-Frank Act, while also possibly having to limit its investments in private equity and hedge funds.
By Claire Archer