Bernanke says he was reluctant on AIG bailout

Staff Writer
Columbus CEO

WASHINGTON (AP) — Former Federal Reserve Chairman Ben Bernanke etched a portrait Friday of his initial reluctance to have the central bank rescue American International Group Inc. in 2008. But he ultimately came to believe the bailout loan to the company was needed to avert a shock to the financial system.

At the same time, Bernanke insisted he didn't agree with other government officials that AIG's dire financial state largely resulted from excessive risk-taking by management — a view that led them to punish the insurance giant with harsh loan terms.

"I did not make any personal judgments about the quality of management at AIG," Bernanke said in his second day of testimony at the trial of a lawsuit brought by former AIG Chairman and CEO Maurice Greenberg.