WASHINGTON (AP) — A Goldman Sachs executive told an inquiry panel yesterday that the firm had no regrets about collecting billions of dollars in taxpayer money for correctly predicting the demise of the US housing market.

David Viniar, Goldman's chief financial officer, said Uncle Sam had an obligation to honour American International Group's full debts. The firm was entitled to be paid $12.9 billion out of the $182 billion bailout that went to crippled insurance giant AIG — the largest federal rescue.

"The government stepped into AIG's shoes" and therefore had to honour its contract with Goldman, Viniar told the congressionally appointed panel investigating the financial meltdown.

Members of the Financial Crisis Inquiry Commission couldn't understand how Goldman could take the full amount owed by AIG, knowing that the US taxpayers were picking up the tab at the onset of the worst recession since the 1930s.

"You were 100 percent recompensed on that deal. and the only people who were out money were the American public," said Brooksley Born, a panel member.

The government "paid 100 cents on the dollar for something that was going for 48 cents at the time", said Bill Thomas, the panel's vice-chairman and a former California Republican who was chairman of the House Ways and Means Committee.