Billions of AIG's federal aid went to foreign banks

— -- AIG disclosed Sunday the names of banks and entities that received a total of $105 billion of its bailout payments made from September through December. Some of the leading recipients of American taxpayer money are France's Societe Generale, $11.9 billion; Deutsche Bank of Germany, $11.8 billion; and Barclays of Britain, $8.5 billion.

The expansive list of international entities — including UBS in Switzerland and Banco Santander in Spain — shows the broad tentacles of AIG's dealings and why the U.S. government believed that saving AIG was important to the global financial system.

"It shows how widespread this interlocking web of financial contracts was," says Raymond Hill, who teaches finance at the Goizueta Business School. "And without government intervention, that web would have collapsed, creating havoc in the global financial system."

However, lawmakers question why other countries didn't get involved in bailing out this wide network of global institutions. "The U.S. cannot bail out the financial system of the world," says Rep. Carolyn Maloney, D-N.Y., chairwoman of the Joint Economic Committee. "Other nations have to be part of the solution in securing the viability of their institutions that are too big to fail."

However, Duke University finance professor Campbell Harvey says it's better that the U.S. take care of its own companies, even if that means financial firms abroad are benefiting.

"If we start asking European governments to kick in for AIG, then (they will) ask us to pitch into their problems, which are way worse than ours," he says.

At the heart of these large payments and losses is AIG's financial products unit, which sold insurance to protect dozens of banks against default on all kinds of debt and securities. AIG then invested the premiums in residential mortgage-backed securities, the market for which has collapsed since the real estate downturn.