President Clinton passed regulations that reformed the essence of the way banks can do business (Lal, 2010). These changes allowed banks to use their depositors money to invest in risky investments; also known as speculation. They had a range of new products to try to hedge their risks. One of these products was known as a derivative and AIG was the leader of the derivative business. Therefore, there was a systematic failure in the free market economy and AIG was at the centre. It is easy to put all the blame on AIG, however it should be shared equally with the regulators and the rules of the free market.

From the CEO's perspective, if I was the CEO, I would not have given myself the bonus; at least until all of the public's money was repaid. Obviously the CEO has a self-serving bias towards their own compensation and it is...
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