Bank Bailout | featured news

Stocks retreated as investors cashed in on their profits a day after Wall Street rallied on new details regarding Washington’s bank-rescue plans.

The top two U.S. financial officials told lawmakers angry over bonus payments to AIG executives that the government needs authority to shut down troubled institutions like the giant insurer to avoid future bailouts.

Federal Reserve Chairman Ben Bernanke told Congress today he wanted to sue to stop insurance giant AIG from paying millions in bonuses, but was talked out of it.

Attorney General Andrew M. Cuomo of New York said 15 of the top 20 bonus recipients in A.I.G.’s financial products division had returned their bonuses.

Investors respond positively to plan to remove up to $1 trillion in bad assets from banks' books.

Documents turned over to the Connecticut attorney general show that American International Group Inc paid out over $218 million in bonuses, more than the previously disclosed $165 million, published reports said on Saturday.

Fallout from anger over AIG's bonuses is following Sen. Chris Dodd from Washington back home to Connecticut.

The House of Representatives is expected to vote Thursday on legislation to try to recoup bonuses paid to Wall Street executives with taxpayer money.

Democrats and Republicans tried to outdo one another in voicing indignation as the House debated a bill to punish A.I.G. executives who got big bonuses.

President Obama said Wednesday that no one in his administration had been responsible for supervising ailing insurance giant AIG but that ultimately, the buck stops with him.