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It was the most significant step yet by the council, which was created by the 2010 financial overhaul law to help prevent another financial meltdown. In order to make the designations final, the council had to vote a second time on each company, with at least two-thirds of the 10 voting members agreeing. Lew, the council's chairman, had to be among the two-thirds. New York-based AIG said in a statement that it "did not contest this designation and welcomes it." Representatives for GE Capital couldn't immediately be reached for comment. AIG sold guarantees on mortgage securities that forced it to pay billions of dollars after the subprime mortgage bubble burst in 2007. AIG was intertwined with the financial system through its sale of mortgage-related investments to big Wall Street banks, which themselves eventually received bailouts. The federal thrift agency had regulated AIG, but the company's mushrooming business involving complex investments called derivatives was run out of London and elsewhere. That business fell through the regulatory cracks.
[Associated
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