Contrary to what was disclosed to the public, Goldman Sachs Group Inc. played a large role in fueling the mortgage bets that nearly felled American International Group Inc., according to a WSJ analysis of AIG’s trades. Goldman was one of 16 banks paid off when the U.S. government last year spent billions closing out soured trades that AIG made with the financial firms.
In one instance, acting as a middleman between AIG and banks, Goldman took on risk of as much as $14 billion of mortgage-related investments and insured that risk solely with AIG, according to the analysis and sources WSJ says are familiar with the trades.
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