Joseph Cassano, the former AIG executive whose financial products division helped trigger a $180bn government bail-out, broke his silence yesterday with a staunch defence of his business's actions leading up to the financial crisis.

AIG Financial Products, which Mr Cassano ran from 2002 until early 2008, housed the portfolio of credit-default swaps and other complex derivatives that became a chief culprit of the company's near-collapse.

The precise causes of AIG's downfall, and the insurer's relationships with counterparties such as Goldman Sachs, remain a focal point for regulators and lawmakers investigating the crisis.

In testimony before the Financial Crisis Inquiry Commission in Washington, Mr Cassano said the division stopped writing new insurance on debt securities backed by subprime loans in February 2006.

He also said the group “remained confident in our risk analysis for the existing deals”, based on the belief that AIG would avoid realised losses.

“I think there would have been few, if any, realised losses on the CDS contracts had they not been unwound in the bailout,” Mr Cassano said.

“As you know, a decision was taken after my departure from AIG-FP to unwind the CDS contracts due largely, so far as I can tell, to the proliferation of collateral calls.”

AIG's auditor, PwC, would eventually find a “material accounting weakness” in the way the insurer had valued the financial products division's portfolio.

The action upped AIG's accounting losses dramatically, and later triggered investigations by the US Justice Department and the Securities & Exchange Commission.

Both government agencies have since ended probes into Mr Cassano's business.