US regulators involved in the $US180 billion rescue of AIG may have overpaid other banks when cutting a deal, a report says.
The New York Fed paid AIG's business partners face value for securities so they would cancel insurance-like contracts AIG had written, the BBC reports.
But a watchdog for America's bailout fund says negotiators used a weak negotiating strategy.
The negotiators were former head of Federal Reserve turned US Treasury Secretary, Timothy Geithner.
Special Inspector General Neil Barofsky's report criticised both the Federal Reserve Bank of New York and the US Federal Reserve for failing to use their "considerable leverage" to force AIG's counterparties to accept less than the full amount for the assets.
As a result, 16 banks, including Goldman Sachs, Deutsche Bank, Societe Generale and Royal Bank of Scotland, were paid more than $62bn.