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| Geithner implicated in New York Fed's alleged move to limit AIG's disclosures |
| 8 Jan 2010 |
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The New York Federal Reserve Bank under Timothy Geithner had urged insurer A-I-G in late 2008 to limit its disclosures after getting a 180 billion US dollar payout.
Emails between the New York Fed and AIG showed the New York Fed had asked the insurer to withhold details of how it was spending bailout funds.
AIG's decision to pay Goldman Sachs, Societe Generale and other banks in full with taxpayer funds was not disclosed by AIG until March 2009.
That was when it announced a 93 billion US dollar payoff that stoked public rage over the bailout.
Adding fuel to the fire, Mr Geithner, who by then had become the US Treasury secretary, could not stop AIG from giving out 165 million US dollars in bonuses.
The emails showed that the transaction was crossed-out from a proposed SEC filing that was "marked up" by attorneys working for the New York Fed.
When the regulatory filing was finally made in December 2008, it made no reference to the counterparty payment rate.
The New York Fed during Mr Geithner's time at the central bank also has been chided for not negotiating hard enough for concessions from the banks.
All but one bank refused to offer any discount on their holdings. |