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Letting AIG fail

Making counterparties on the company's derivative deals take a haircut (as would happen in a failure) would not have to mean leaving policyholders without insurance (the conventional insurance divisions are solvent and under no obligation to the derivative counterparties). Lucien Bebchuk and Larry Ribstein, who disagree on many other matters, seem to be in accord on this one.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.