Despite a March GAO report recommending that American International Group Inc. seek concessions from stakeholders including management, employees and derivatives counterparties, Treasury Secretary Timothy Geithner testified before the Senate Banking Committee that no haircuts are forthcoming.

Committee chairman Sen. Christopher Dodd asked Geithner why the Treasury Department has not required any concessions from AIG counterparties. “While I except the arguments about systemic risk, I find it hard to understand why we have to go on indefinitely paying off these companies at 100% if AIG is not worth 100%,” Dodd said. “Where is the negotiation?”

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