BANKERS at AIG's disgraced Mayfair operations -- dubbed the Ground Zero of the financial crisis -- are receiving $1 million bonuses.
That is despite the AIG Financial Products division losing $40.5 billion (Pounds 28.6 billion) last year, triggering the collapse of the insurer and a subsequent bailout by the American taxpayer.
Documentation forced into the open by the US Congress reveals that at least seven executives are picking up more than $3 million at the division of what was once the world's biggest insurance company. AIG, which has received $150 billion from the US government since September last year, is making payments of $450 million to 400 staffers.
Those payments are going to employees in AIG Financial Products, the part of the insurer that crippled the company by making huge losses on the toxic derivatives that have brought the world financial system to its knees. Rather than calling the payouts bonuses, the insurer -- which posted a record fourthquarter loss of $61.7 billion on 2 March -- is labelling them "retention" payments.
In London, AIG Financial Products worked in the heart of the Mayfair hedge-fund industry, sharing an impressive building with GLG Partners, London's biggest independent hedge-fund manager. AIG's Mayfair office specialised in trading derivatives known as credit default swaps, the insurance that lenders take out to make sure their debts do not go bad, but the market imploded in the credit crunch, leaving AIG with liabilities amounting to tens of billions of dollars.
The Mayfair operation was run by controversial financier Joe Cassano, whose departure from AIG's London office a year ago heralded the division's collapse. Recipients of the big bonuses in London could include directors of AIG's operations in Curzon Street. …