Dynamist Blog

Do Bailouts Beget More Bailouts?

Is fear of expropriation deterring the private capital infusions that might rescue failing financial firms without involving the taxpayers? This passage, buried in Eric Dash and Andrew Ross Sorkin's detailed NYT account of the scramble to save AIG, suggests that might just be the case.

By Sunday, K.K.R. and the Texas Pacific Group made it clear they would not come to the rescue, worried that A.I.G. might be taken over by the government, wiping out their investments. Goldman Sachs also balked.

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