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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S ERIN BURNETT SITS DOWN WITH FORMER AIG CEO, ROBERT WILLUMSTAD, ON CNBC'S "STREET SIGNS" TODAY

Karen Reynolds
Thursday, 16 Oct 2008 | 2:36 PM ET

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S ERIN BURNETT SITS DOWN WITH FORMER AIG CEO, ROBERT WILLUMSTAD, ON CNBC'S "STREET SIGNS" TODAY

WHEN: Today, Wednesday, October 15th at 2:12 PM ET

WHERE: CNBC's "Street Signs"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with former AIG CEO, Robert Willumstad, on CNBC's "Street Signs."

All references must be sourced to CNBC.

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ERIN BURNETT: I WAS LISTENING TO BEN BERNANKE AT THE NEW YORK ECONOMIC CLUB AND HE SPOKE ABOUT BOTH AIG AND LEHMAN BROTHERS. HIS QUOTE ABOUT AIG WAS "FAILURE WOULD HAVE SEVERELY THREATENED GLOBAL AND FINANCIAL STABILITY AND THE PERFORMANCE OF THE U.S. ECONOMY" -- THE SITUATION WAS CLEARLY UNPRECEDENTED ON THE WEEKEND WHEN ALL OF THIS CAME TO A HEAD AND YOU AND THE BOARD HAD TO DECIDE WHAT TO DO. BASICALLY ALLOW THE FINANCIAL SYSTEM TO GO UNDER OR TAKE A LOAN THAT WAS CERTAINLY ON VERY CHALLENGING TERMS. CAN AIG STILL GET THROUGH THIS WITHOUT A MASSIVE ISSUE FOR THE U.S. TAXPAYER?

ROBERT WILLUMSTAD:I THINK SO. I MEAN IT'S, I'VE LEFT THE COMPANY. I'M NOT SURE EXACTLY WHAT'S HAPPENED TO THE LIQUIDITY POSITION AND HOW MUCH THE COMPANY NEEDS, BUT THERE WERE CERTAINLY MORE THAN ENOUGH ASSETS TO COVER THE $85 BILLION LOAN INSIDE THE COMPANY. SO I THINK THE OPPORTUNITY TO WORK THROUGH THAT SO THAT THE TAXPAYERS DON'T LOSE ANY MONEY IS PRETTY GOOD.

BURNETT: PEOPLE ARE CONCERNED THOUGH, THAT WITHIN A FEW WEEKS, THEY NEEDED ANOTHER $38 BILLION, DID IT SURPRISE YOU TO SEE THAT?

WILLUMSTAD: WELL AGAIN, I'M NOT SURE WHAT THE USE OF THAT MONEY WAS. OBVIOUSLY THE COLLAPSE OF THE CAPITAL MARKETS REALLY EXACERBATED THE PROBLEM NOT ONLY FOR JUST AIG BUT FOR MANY FINANCIAL COMPANIES.

BURNETT: THEY CAME IN, THE FEDS, ON THAT WEEKEND WHEN YOU WERE ABLE TO FIND A SOLUTION HERE (WHICH I'LL PUT QUOTES AROUND) AND YOU GOT THIS LOAN FROM THE GOVERNMENT. AND THE RATE, JUST LOOKING AT, IT WAS BASED ON LIBOR, JUST AS OF TODAY LOOKING AT THAT RATE IT'S ABOUT 12.6%. AND AGAIN THAT'S JUST TODAY. BUT HANK GREENBERG, WHO WAS OBVIOUSLY THE CEO OF AIG WHEN THEY GOT INTO A LOT OF THESE TROUBLED PRODUCTS, SAYS AIG SHOULD RENEGOTIATE THIS LOAN MAYBE GET IT ON THE SAME TERMS AS THESE OTHER BANKS THAT THE FED IS UH, THAT THE TREASURY IS, GOING TO BE TAKING STAKES IN WITH THIS 5% PREFERRED RATE. DO YOU THINK THAT'S A SMART THING TO DO?

WILLUMSTAD: WHEN THE LOAN WAS GIVEN TO AIG, WE REALLY HAD VERY LITTLE CHOICE. IT WAS EITHER BANKRUPTCY OR THE GOVERNMENT'S HELP. OBVIOUSLY, WE, THE BOARD, DECIDED TO TAKE THE GOVERNMENT'S HELP. TIMES HAVE CHANGED. OBVIOUSLY, IT'S ONLY FOUR WEEKS TO THE DAY.

BURNETT: IT'S INCREDIBLE IT'S ONLY FOUR WEEKS.

WILLUMSTAD: TO THE DAY. CIRCUMSTANCES HAVE CHANGED. I THINK HANK'S PROPOSAL, AS I UNDERSTAND IT, IS VERY MUCH LIKE WHAT THE TREASURY IS DOING FOR THE BANKS IN TERMS OF PREFERRED STOCK AND SMALLER EQUITY INVOLVEMENT. OBVIOUSLY, SOMETHING LIKE THAT WOULD BE A LITTLE BUT MORE POSITIVE AND BENEFICIAL FOR THE SHAREHOLDERS, BUT I THINK THAT'S UP TO THE FED AT THIS JUNCTURE.

BURNETT: IT'LL BE INTERESTING TO SEE IF THEY DO THAT. NOW YOU HAD SPENT THREE MONTHS, YOU CAME IN, IN JUNE, OBVIOUSLY BEFORE THAT YOUR WERE ON THE BOARD. YOU HAD COME UP WITH A PLAN. AIG KNEW IT HAD PROBLEMS BEFORE. IT WASN'T LIKE WE SUDDENLY REALIZED THIS. THAT WAS WHY MARTIN SULLIVAN WAS PUSHED OUT, YOU WERE BROUGHT IN, AND YOU CAME UP WITH A PLAN WHICH WAS GOING TO BE ANNOUNCED ON SEPTEMBER 25th. WOULD THAT PLAN HAVE CHANGED THIS SITUATION?

WILLUMSTAD: WELL I THINK THE PLAN WAS REALLY DESIGNED TO TRY AND GET MUCH OF THE SUBPRIME PROBLEMS BEHIND THE COMPANY. AND I THINK ONCE THE MARKETS KNEW THAT, THAT WAS NO LONGER A PROBLEM, NOT AN OVER-HANG TO AIG, I THINK IT WOULD HAVE GONE A LONG WAY TO SOLVING THE PROBLEM. THE PROBLEM I THINK, ULTIMATELY,AND THE PLAN WAS PRETTY MUCH COMPLETED, THE PROBLEM REALLY GOT EXACERBATED ON SEPTEMBER 8th, THIS WAS RIGHT AFTER THE TREASURY STEPPED IN AND TOOK OVER FANNIE AND FREDDIE AND THE LEHMAN BANKRUPTCY WAS RUNNING THROUGH THE MARKETS. AND AT THE TIME AIG STOCK HAD BEEN PRETTY LEVEL THROUGHOUT THE WHOLE SUMMER MONTHS. AND IT WAS IN FACT $23 ON SEPTEMBER 8TH, IT WAS $26 AT THE END OF JUNE. SO IT WAS HANGING IN THERE, AT ALBEIT A MUCH LOWER LEVEL THAN IT HAD BEEN. BUT ONCE SEPTEMBER 8th CAME AROUND, AND THAT NEWS TOOK HOLD, THE STOCKS STARTED TO SLIDE. THE RATING AGENCIES DECIDED THEY WERE GOING TO DOWNGRADE THE COMPANY, THAT PRECIPITATED A MUCH LARGER REQUIREMENT FOR LIQUIDITY. THE DOWNGRADE CAUSED ALMOST $20 BILLION IN LIQUIDITY RIGHT OFF THE BAT. AND OBVIOUSLY EVERYTHING AFTER THAT AS THE MARKETS IMPLODED. THE SYSTEM IS REALLY SO INTERLINKED AND IN MANY WAYS VERY FRAGILE. SO THAT WHEN ONE LINK IN THE CHAIN IS BROKEN EVERYBODY RETREATS, AND I THINK ONCE LEHMAN WAS ANNOUNCED THAT THEY WERE GOING BANKRUPT, THE WHOLE SYSTEM KIND OF WITHDREW AND AIG WOUND UP SHORT OF ALL OF THE CASH IT NEEDED TO MAKE ITS PAYMENTS.

BURNETT: AIG, DID IT MAKE A MISTAKE OVERALL GETTING INTO THIS BUSINESS? IT SEEMED IT WAS FOOL-PROOF, THEY DIDN'T HAVE TO RESERVE AGAINST IT, PUT IT UP WITH A HOLDING COMPANY, WE HAVE THIS GREAT RATING, WE'LL RUN IT OUT TO EVERYBODY. WE'LL INSURE ANY LOAN, ANYBODY WANTS, WE'LL INSURE PRETTY MUCH ANYWHERE, EUROPE OR HERE, AND WE'RE NOT GOING TO HAVE TO WORRY ABOUT IT. WAS THAT JUST CRAZY, LOOKING BACK? I KNOW YOU DIDN'T MAKE THE DECISION SO I'M NOT BLAMING YOU, I'M JUST SAYING IT SEEMS CRAZY WHEN YOU THINK ABOUT IT.

WILLUMSTAD: WELL, HINDSIGHT IS 20/20 OBVIOUSLY AND I THINK NO ONE REALLY EXPECTED TO SEE THE U.S. HOUSING MARKET DO WHAT IT DID. THOUGH WHEN THESE SECURITIES WERE PUT ON, THEY WERE AAA RATED BY ALL THE RATING AGENCIES, THEY WERE CATEGORIZED AS SUPERSENIOR SO IN THE CAPITAL STRUCTURE THEY WERE ACTUALLY ABOVE AAA. SO THERE WAS A GOOD REASON TO BELIEVE AND I THINK FROM A RISK MANAGEMENT POINT OF VIEW AND EVEN FROM A BOARD POINT OF VIEW, THERE WAS REASON TO BELIEVE THAT THERE WAS VERY LITTLE RISK IN THESE TRANSACTIONS, BUT OBVIOUSLY IT WAS A LARGE EXPOSURE FOR AIG. DERIVATIVES REALLY DON'T HAVE CAPITAL OR RESERVES BEHIND THEM.

BURNETT: DO YOU SUPPORT THAT CHANGING? ERIC DINALLO, YESTERDAY, THE NEW YORK STATE INSURANCE COMMISSIONER, WAS SPEAKING I BELIEVE, TO A SENATE COMMITTEE AND HE SAID THAT EVEN SLOT MACHINES IN LAS VEGAS ARE MORE REGULATED THAN THE DERIVITIVES MARKET, THAN THE CDS MARKET IN PARTICULAR WHERE AIG PLAYED. WERE YOU A SUPPORTER WHEN YOU WERE A CEO, OF CHANGING THAT REGULATION WHICH WOULD REQUIRE RESERVES, AND A LOT MORE DISCLOSURES AND MAYBE EVEN A CLEARINGHOUSE WHERE THEY WERE TRADED? WERE YOU A SUPPORTER OF ALL OF THAT?

WILLUMSTAD: I THINK THE ANSWER IS YES. I MEAN IT'S AN UNREGULATED MARKET AND OBVIOUSLY REGULATION BRINGS SOME STABILITY AND SOME STRUCTURE AROUND THINGS. AND THE APPROPRIATE ACCOUNTING, AND RESERVING METHODOLOGY WOULD HAVE PROVIDED A CUSHION, SIMILAR TO THE WAY INSURANCE CONTRACTS ARE RESERVED FOR TODAY AND REQUIRED AMOUNT OF CAPITAL BASED ON PROPER REGULATION. SO THE ANSWER IS YES.

BURNETT: YOU SUPPORT THAT? NOW WHAT ABOUT THE OVERALL SYSTEM? AIG, OBVIOUSLY A CRUCIAL LINCHPIN OF THAT AS EVIDENCED BY THE FACT THAT THE FED CHIEF BROUGHT IT UP TODAY, BUT THERE IS A GREAT FEAR OUT THERE AND THAT'S WHY WE SEE THE MARKET DOWN 545 POINTS AND THEN UP. NOBODY UNDERSTANDS WHAT'S GOING ON. THE MORE THEY THINK ABOUT IT, THE LESS THEY UNDERSTAND ABOUT THE RISKS THAT ARE IN THIS SYSTEM THAT YOU DESCRIBED AS FRAGILE. DO YOU HAVE ANY SENSE OF HOW BIG THE RISKS ARE OUT THERE? JUST GIVEN THE BIRD'S EYE VIEW THAT YOU HAD OF AIG'S REAL RISK.

WILLUMSTAD: AGAIN, IT'S FRAGILITY OF THE SYSTEM. I MEAN WHAT CAUSED AIG IN MANY WAYS, OBVIOUSLY IN ADDITION TO THE CDS WAS THE LACK OF CONFIDENCE. I MEAN THE SYSTEM HAS GIVEN UP OR DIDN'T HAVE CONFIDENCE THAT AIG COULD MEET ITS OBLIGATIONS. ONCE ONE PARTY IS SUSPECT, ALL THE REST OF THE COMPONENT PIECES OF THE SYSTEM KIND OF WITHDRAW. MUCH OF AIG'S LIQUIDITY PROBLEM IS NOT BECAUSE AIG DIDN'T HAVE THE CASH ITSELF, IT NO LONGER HAD THE CASH BECAUSE PEOPLE WHO WOULD TYPICALLY LEND TO AIG STOPPED LENDING. AND IT COULDN'T ROLL ITS COMMERCIAL PAPER. SO THE SYSTEM IS FRAGILE. WHAT DRIVES THE SYSTEM IS CONFIDENCE AND I THINK THE EQUITY INVESTMENTS THAT TREASURY IS PUTTING IN THE BANKS SHOULD GO A LONG WAY TO ADD CONFIDENCE AT LEAST AT THE BANK LEVEL. THE COUNTERPARTIES KNOW THEY CAN TRADE WITH EACH OTHER AND SETTLE WITHOUT THE RISK OF FAILURE IN THE SYSTEM. BUT IT IS A FRAGILE SYSTEM. ITS ALWAYS BEEN A FRAGILE SYSTEM.

BURNETT: DOES THE GOVERNMENT NEED TO DO ANYTHING ELSE? AND TO EMPHASIZE TO VIEWERS NOT ONLY WERE YOU AT THE HELM OF AIG ON THE BOARD THERE, YOU ALSO HAVE PREVIOUSLY BEEN ON THE BOARD OF MASTERCARD, YOU WERE THE CHIEF OPERATING OFFICER AND PRESIDENT OF CITIGROUP. SO THERE'S PRETTY MUCH NO ONE WHO WOULD KNOW THIS SYSTEM BETTER THAN YOU KNOW THE SYSTEM. IF THEY HAD TO DO ONE MORE THING NOW OR IF THERE'S SOMETHING THEY HAVEN'T DONE THAT THEY SHOULD DO , WHAT IS IT?

WILLUMSTAD: WELL IT'S HARD TO SAY. I THINK THIS IS AN EVOLVING KIND OF SITUATION. AGAIN, I THINK THE STEP TO PUT CAPITAL INTO THE BANKING SYSTEM TO GUARANTEE SOME OF THE DEBT EVEN THE EXTENTION OF FDIC INSURANCE. AGAIN, ALL GOES TO PUTTING CONFIDENCE BACK IN THE SYSTEM. I THINK THE PURCHASE OF TOXIC ASSETS IS A LITTLE BIT TRICKIER.

BURNETT:WELL, AIG COULD FILL THE TARP UP ITSELF WITH WHAT'S LEFT, RIGHT? WE'VE GOT $400 BILLION LEFT, NOT EVEN.

WILLUMSTAD: WELL, THE SUBPRIME ASSETS IN AIG REALLY ARE AT THE $60 BILLION LEVEL.

BURNETT: WELL HASN'T IT SPREAD, NOT JUST AT AIG, BEYOND THAT? I MEAN THAT'S THE BIG FEAR. WE HAVE LEVERAGE LOANS, WE'VE GOT HIGH YIELD LOANS, WE'VE GOT CREDIT CARD LOANS. YOU START TO SEE A CASCADING PROBLEM. AND YOU'RE LOOKING AT TRILLIONS. RIGHT.

WILLUMSTAD: SURE.

BURNETT: WE HOPE YOU WON'T GET THERE, BUT THAT'S THE FEAR OUT THERE. SO, WHICH BRINGS ME TO THE QUESTION OF WHETHER WE'LL GET THERE AND YOUR VIEW ON THAT, OBVIOUSLY FROM YOUR BACKGROUND, FOR THE OVERALL ECONOMY. EARLIER THIS WEEK JULIAN ROBERTSON, ON THIS SHOW, SAID HE THINKS IT COULD BE 10 YEARS, MAYBE 15 AND HE WASN'T CALLING FOR A DEPRESSION WHICH WOULD BE A DECLINE OF 10% IN ECONOMIC GROWTH A YEAR, BUT HE WAS CALLING FOR 10 TO 15 YEARS. DO YOU THINK IT WILL BE THAT BAD?

WILLUMSTAD: I THINK IT'S GOING TO GET WORSE BEFORE IT GETS BETTER. I THINK CERTAINLY 2009 IS GOING TO BE A TOUGH YEAR. IN MY EXPERIENCE IN THE CONSUMER BUSINESS, TWO THINGS REALLY DRIVE THE ECONOMY. ONE IS UNEMPLOYMENT AND THE OTHER IS CONSUMER CONFIDENCE. THERE'S A LOT OF NEGATIVE NEWS OUT IN THE SYSTEM. IT'S HARD FOR CONSUMERS TO BE CONFIDENT. EVEN IF THE BANKS ARE LENDING MONEY, PEOPLE STILL HAVE TO HAVE THE DESIRE TO BORROW AND WILLINGNESS TO SPEND. AND I THINK THAT'S GOING TO BE DIFFICULT FOR A PERIOD OF TIME. AND OBVIOUSLY UNTIL HOUSING PRICES START TO BOTTOM OUT, WHERE PEOPLE, AGAIN, FEEL CONFIDENT THAT THEY CAN PAY THEIR MORTGAGE AND HAVE SOME CONFIDENCE IN THE OVERALL ECONOMY. SO I THINK 2009'S GOING TO BE TOUGH. I'M NOT SURE HOW LONG IT WILL LAST BEYOND THAT.

BURNETT: YOU GAVE BACK YOUR $22 MILLION SEVERANCE PACKAGE. ACTUALLY THAT'S YOURS. AND A LOT OF PEOPLE ON THIS NETWORK AND GUESTS HAVE SUPPORTED PEOPLE FOR THAT IF ITS CONTRACTUALLY THEIRS. WHY DID YOU CHOOSE TO RETURN IT?

WILLUMSTAD: WELL, I DIDN'T GET A CHANCE TO EXECUTE THE PLAN AS WE TALKED ABOUT EARLIER AND WHEN SEPTEMBER 16th CAME AROUND, AN AWFUL LOT OF THE AIG EMPLOYEES WHO HAD REALLY ACCUMULATED ALMOST ALL THEIR WEALTH IN AIG STOCK AND OPTIONS AND HAD WORKED THERE FOR A LONG TIME, WORKED REALLY HARD, SHAREHOLDERS WHO ULTIMATELY HAVE LOST A LOT OF MONEY, IT JUST SEEMED INAPPROPRIATE. IT JUST DIDN'T SEEM LIKE THE RIGHT THING TO DO, HAVING BEEN THERE ONLY THREE MONTHS, TO WIND UP TAKING SUCH A LARGE SUM OF MONEY. AND THAT WAS NOT A CONTRACTUAL OBLIGATION, THAT WAS A PART OF THE AIG EXECUTIVE SEVERANCE PLAN. SO THAT WAS WHAT I WAS ENTITLED TO ALONG WITH OTHER SENIOR EXECUTIVES. IT JUST DIDN'T SEEM LIKE THE RIGHT THING TO DO.

BURNETT: DO YOU UNDERSTAND THE AMERICAN PUBLIC'S, I'M TRYING TO THINK ABOUT THE RIGHT WORD, I DON'T WANT TO USE THE WORD HATERED, BUT EXTREME DISGUST WITH WHAT HAPPENED ON WALL STREET, THE SORT OF COMPENSATION THAT WAS PAID OR DO YOU THINK THAT THAT WAS BEING FED, AIDED AND ABETTED BY SOMEBODY, WHETHER IT'S THE MEDIA OR WHOMEVER?

WILLUMSTAD: WELL, IT'S HARD TO ARGUE THAT EXECUTIVES ON WALL STREET DON'T MAKE A LOT OF MONEY. I THINK THERE'S SOME QUESTIONABLY, THERE ARE LARGE SALARIES AND LARGE COMPENSATION PACKAGES AND ONE CAN UNDERSTAND WHY THE PUBLIC MIGHT BE ANGERED BY THAT. I THINK AS LONG AS THERE'S A REAL PAY FOR PERFORMANCE MODEL INSIDE OF WALL STREET AND ANY OTHER INSTITUTION NOT JUST WALL STREET, I THINK IT'S FAIR AND EQUITABLE ON THAT BASIS. OBVIOUSLY, THINGS LIKE GOLDEN PARACHUTES AND OTHERS THAT REALLY GET AT THE ISSUE OF WHY PEOPLE ARE SO UPSET.

BURNETT: I'M LOOKING AT THE TREASURY DEPARTMENT, WHEN THEY SAID, WE'RE GOING TO TAKE EQUITY STAKES IN BANKS, WE'RE GOING TO TAKE YOUR TROUBLED ASSETS, AND THEN THEY SAID AS PART OF THE LEGISLATION, EXECUTIVE COMP LIMITS WILL BE IN. OBVIOUSLY NO GOLDEN PARACHUTES WAS PART OF IT. THE OTHER PART IS, ANY OF THESE BANKS CANNOT DEDUCT, FOR TAX PURPOSES, EXECUTIVE COMPENSATION ABOVE $500,000. DOES THAT MEAN ANYTHING? DOES THAT HAVE ANY TEETH?

WILLUMSTAD: WELL IT PROBABLY HAS SOME TEETH, BUT REMEMBER, EVEN TODAY, MOST SENIOR EXECUTIVE COMPENSATIONS TEND TO COME IN BONUSES AND STOCK OPTIONS WHICH WOULD NOT BE IMPACTED BY THIS AS I UNDERSTAND IT. SO THE REAL ISSUE IS THE LARGER INCENTIVE COMPENSATION PACKAGES THAT EXIST ON WALL STREET. THOSE ARE THE MOST IMPORTANT THINGS. THAT'S WHERE MOST OF THE MONEY GOES.

BURNETT: TWO QUICK MORE QUESTIONS. ONE, JUST BECAUSE GRETCHEN MORGENSON WROTE ABOUT IT, I THOUGHT, IN HER EXCELLENT NEW YORK TIMES ARTICLE, WAS THAT THE UNIT ONLY HAD 377 PEOPLE IN IT OF AIG OUT OF MORE THAN 100,000 EMPLOYEES THAT WAS ABLE TO BRING THE ENTIRE COMPANY DOWN OVER THE TIME FRAME THAT THEY WERE IN THIS BUSINESS. THEY GOT $3.6 BILLION IN BONUSES. OBVIOUSLY THESE ARE PEOPLE THAT ARE PROBABLY NOT GOING TO GIVE IT BACK. WITHOUT MAKING A STATEMENT AS TO WHAT SHOULD HAPPEN HERE, WOULD YOU MAKE AN ARGUMENT FOR THE PURSUIT OF INDIVIDUALS WHO WERE INVOLVED IN BUYING, SELLING AND CREATING THESE SECURITIES, NOT AT THE EXECUTIVE LEVEL, AT THE REGULAR LEVEL FOR HAVING TO GIVE SOME IT BACK, FOR THE GOVERNMENT PURSUING THAT?

WILLUMSTAD: I THINK IT'S PRETTY TOUGH AT THIS JUNCTURE. MOST OF THESE EMPLOYEES EITHER HAD CONTRACTS OR ARRANGEMENTS, THEY WERE PAID --

BURNETT: OR THEY SPENT IT.

WILLUMSTAD: OR THEY SPENT IT. BUT THEY GOT PAID BASED ON AN AGREEMENT BETWEEN THE COMPANY AND THE INDIVIDUALS. I THINK PROSPECTIVELY, GOING FORWARD, THE ABILITY TO CHANGE THOSE PROGRAMS MAKES SENSE. IT'S PRETTY HARD TO GO BACK AND ASK SOMEBODY TO GIVE BACK MONEY THAT THEY PRESUMABLY EARNED FAIRLY AT THE TIME.

BURNETT: AND WHAT IS NEXT FOR YOU PERSONALLY?

WILLUMSTAD: WELL, I'M NOT SURE YET. I SPENT A FEW YEARS IN MY OWN PRIVATE EQUITY FIRM BEFORE I WAS ASKED TO GO JOIN AIG.I'M CONSIDERING GOING BACK TO BRYSANT, THE PRIVATE EQUITY FIRM, BUT HAVEN'T MADE THAT DECISION YET.

BURNETT: WOULD YOU, IF ASKED, HAVE ANY INVOLVEMENT IN EITHER WHAT'S GOING ON IN WASHINGTON OR IN THIS CLEARINGHOUSE THEY ARE TRYING TO CREATE A MARKET FOR THE COMPLEX CDS, GIVEN THAT YOU'RE ONE OF THE FEW PEOPLE THAT UNDERSTAND THEM?

WILLUMSTAD: WELL,I HAVEN'T BEEN ASKED, BUT I WOULD CERTAINLY CONSIDER SOME OPPORTUNITY TO GIVE BACK TO THE GOVERNMENT AND TO THE COUNTRY IF THAT OPPORTUNITY PRESENTED ITSELF.

BURNETT: THANK YOU FOR TALKING TO US TODAY.


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