Goldman Sachs defends collateral calls to AIG as 'reflecting the market'

2 August 2010

Goldman Sachs has issued a defence of its collateral calls to AIG at the height of the financial crisis.

The investment bank has faced criticism for profiting from the $182 billion state bailout of AIG, but representatives of Goldman Sachs have now told the Financial Crisis Inquiry Commission (FCIC) that its collateral requests to AIG were based on "observable market data", reports Reuters.

According to the news provider, this information was recorded between July 2007 and November 2008.

"We made those collateral calls based on prices that reflected the deteriorating conditions in the market for the underlying collateral in residential mortgage-backed securities and collateralized debt obligations," the bank stated.

In June, Phil Angelides, the chairman of the FCIC, accused Goldman Sachs of giving an "abysmal" response to requests for information from the commission.

He said that while its representatives had failed to answer some questions, it had also provided an indigestible five terabytes of data - equivalent to 2.5 billion pages - for the inquiry to root through.

By Gary Cooper

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