NEW YORK Oct 7 Goldman Sachs (GS.N) had
purchased $20 billion worth of protection from American
International Group (AIG.N) in the credit default swap market,
and was a "significant counterparty" to the insurer, according
to a former AIG chief executive.
Robert Willumstad, AIG chief executive from June through
mid-September 2008, made the statement at a U.S. House
Oversight and Government Reform hearing on Tuesday.
The New York Times reported last month that Goldman was
AIG's largest trading partner, with $20 billion in exposure, a
report that was shot down by the bank as "seriously
Goldman spokesman Michael DuVally said on Tuesday that the
bank's exposure to AIG is hedged and collateralized.
"Our net exposure to AIG is not material to us," he said.
AIG sold protection to banks on pools of risky mortgages
and other assets in the $55 trillion credit derivatives
The U.S. government bailed out AIG with a loan of up to
$85 billion last month, after its stock dived and its debt
costs soared on concerns over losses the company will take on
those protection policies.
(Reporting by Karen Brettell and Jonathan Spicer; Editing by