New York Fed Told AIG Not to Disclose Counterparty Payments

In emails from the New York Fed obtained by California Republican Darrell Issa's office, the New York Fed told AIG not to disclose the payments AIG was making to counterparties when the Fed was bailing out AIG.

By Robert Stowe England
January 7, 2010

Officials from the New York Fed in emails in December 2008 pressured AIG not to disclose how much was paid to counterparties in the federal government bailout of AIG earlier that year.

Normally, such information would be disclosed in an 8-K filing by AIG.

The emails were obtain by Representative Darrell Issa, California Republican, and released to the press yesterday.

Under a bailout deal overseen by then New York Fed Chairman Timothy Geithner, the government agreed to provide 100 cents on the dollar for credit default swaps that were worth considerably less.

Through the bailout, full payment on the notional value of the credit default swaps were made by AIG to Goldman Sachs, Societe Generale and other counterparties.

The actual emails can be seen at this link :

The payment of full value by AIG to its counterparties on credit default swaps was also criticized by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and reported by Mind Over Market at this link:

Further, Goldman Sachs played a starring role in the entire bailout. Many many of the bailed out positions made by AIG's 100 percent reimbursement, both at Goldman and other counterparities, were written against derivatives underwritten by Goldman Sachs.

See story here:


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