March 16, 2009 / 10:25 AM / 11 years ago

SocGen defends payments from AIG

PARIS (Reuters) - French bank Societe Generale defended its actions after the disclosure that it was among European banks which received payments from U.S. insurer AIG following its bailout.

France’s third biggest by market value said on Monday it had acted within its rights to call on AIG for cash. “Societe Generale acted in this matter in full conformity with our counterparty agreements with AIG,” it said in a statement.

“Societe Generale issued collateral calls to AIG in accordance with the terms of those agreements as a result of specified credit events at AIG,” it said.

“The collateral posted by AIG, and the amounts paid, were fully consistent with the terms of those agreements.”

Among European banks, SocGen was the biggest recipient at $11.9 billion, Deutsche Bank AG received $11.8 billion and the UK’s Barclays Plc was paid $8.5 billion.

AIG, which has received federal bailouts totaling $173 billion, said on Sunday it had paid billions of dollars to a number of banks, partially in the form of collateral to back up credit default swaps, a form of financial insurance.

The sums also included purchases of collateralized default obligations, a debt security that underlay that insurance, and payments to counterparties of a securities lending program.

AIG unveiled a list of payments amid growing pressure on the insurer to disclose the beneficiaries of the U.S. bailout ahead of a congressional hearing on Wednesday.

The AIG disclosures do not include payments since December 31.

Reporting by Tim Hepher; Editing by David Holmes

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