Greenberg blames AIG woes on shorts, accounting

WASHINGTON: A former chief executive of American International Group Inc defended the insurer's risk management but said looser accounting and curbs to market short-selling could have saved it.

Changes to so-called fair value accounting and rules governing investors who make bets that a stock will fall could have mitigated AIG's liquidity problems, Maurice "Hank" Greenberg wrote in testimony to a congressional panel submitted on Tuesday. Greenberg, a former CEO who ran the company for nearly four decades, will not appear because of illness.

Greenberg left in 2005 following an accounting scandal for which he has denied any wrongdoing. He was AIG's largest individual shareholder before the company agreed to a federal bailout that gave the government 80 percent ownership. Greenberg also said the role of credit agencies needs to be reexamined.