At least $50bn of the federal bailout money has benefited around 12 financial institutions, reports said

Billions of dollars of federal bailout money which went to prop up American International Group has been paid directly to other financial institutions, according to reports.

The reports said at least $50bn of the federal bailout money has benefited at least two dozen US and European financial institutions.

When asking for its latest bailout funds AIG warned the US government that there would be turmoil around the world if it was allowed to fail.

AIG is now paying money to its counterparties because it had agreed to guarantee them against losses from credit default swaps they had invested in, reported the Associated Press

Goldman Sachs and Deutsche Bank each received about $6bn in payment, said the Wall Street Journal, citing a confidential document and people familiar with the matter.

Also receiving AIG money were Merrill Lynch, Societe Generale, Morgan Stanley, Royal Bank of Scotland and HSBC Holdings, said the newspaper.

The Federal Reserve first bailed out AIG in September last year with an $85bn credit facility, after collateral demands from banks left AIG facing bankruptcy. Late last year, the bailout package was increased to $150bn. Last week a further $30bn in equity was offered.