Barclays Got [Pounds Sterling]6bn of Insurer's Bailout Cash

Article excerpt

Byline: ROBERT LEA

BARCLAYS is one of the single largest beneficiaries of the US government's bailout of AIG, it emerged today. It received about [pounds sterling]6 billion, or the equivalent of the whole of the British bank's profits for last year.

AIG has been forced by Congressional pressure to finger the banks to which it has paid out money from the $150 billion ([pounds sterling]106 billion) rescue fund it received from the US taxpayer.

Of those, Goldman Sachs, whose former executive Hank Paulson was Treasury Secretary at the time of the bailout, was the single largest recipient of funds from AIG with $12.9 billion.

But, to the consternation of many American politicians, much of the money has crossed the Atlantic to settle AIG's bad bets with European banks.

Deutsche Bank and Societe Generale were the largest recipients with $12 billion each while Barclays received $8.5 billion.

Barclays refused to comment on when it received funds from AIG, but postings from AIG indicate funds went to Barclays by the end of 2008.

Barclays, headed by chief executive John Varley, is known to have been one of AIG's largest counterparties on credit default swaps -- the derivatives used to insure borrowers against losses on bad debts -- and to have been a long-time business party of AIG.

The huge size of the funds flowing in from AIG has immediately sparked speculation that the indirect bailout from US taxpayer funds could be responsible for Barclays being able to refuse help from the British taxpayer. …