Where is Europe's contribution to AIG rescue?

Reuters reports an AIG failure would still be disastrous for global markets and provides a litany of excuses for the latest bailout of the firm imposed on U.S. taxpayers. According to the Reuters report:

“The government really does not have the option of letting AIG totally blow up,” said Robert Haines, senior insurance analyst at CreditSights,

AIG’s foray into the roughly $28.5 trillion credit default swap market left it heavily exposed to losses on toxic mortgage assets that it had guaranteed against default.

AIG, through a financial products unit, sold more than $450 billion of protection on securities to U.S. and European banks. With government support, some of those derivatives have been unwound, but the company still has about $300 billion of this exposure, according to Credit Sights.

Haines said that European banks in particular, counterparties on many of AIG’s outstanding derivative contracts, “would be hammered if the U.S. walked away.”

Donn Vickrey, an analyst with Gradient Analytics, who has closely followed the financial deterioration at AIG said while “European banks are about two-third of the problem … it would be a domino effect across the globe.

“The ensuing panic would be disastrous,” he said.

If European banks have two-thirds of the remaining exposure to AIG financial guarantees, why are U.S. taxpayers footing the entire bill? AIG has operations in more than 100 countries. As I understand it, the subsidiary that did the serious damage is British, not American. Have U.S. politicians made any attempt to extract help from other central banks and national treasuries?

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