posted
hmmm...The email I linked doesn't use the term synthetics. It seems the NY Fed and AIG were using that as a codeword in emails to refer to Credit Default Swaps.
27.1 Bil of the money that went into AIG went out to other banks and investors to pay off the Credit Default Swaps at full value.
Fed response is no harm, no foul. AIG took a loan and is on track to repay America's citizens every dime plus interest.
SeekingFreedom
posted
First shots coming from his own party?
House panel wants Geithner to testify about New York Fed and AIG
The chairman of the House oversight committee turned the spotlight Friday once again on the government's much-maligned bailout of American International Group, saying he would ask Treasury Secretary Timothy F. Geithner to testify about whether company executives were told to withhold key details about how they were spending taxpayer money.
Rep. Edolphus Towns (D-N.Y.), chairman of the House Committee on Oversight and Government Reform, said he will hold a hearing later this month to examine the Federal Reserve Bank of New York's role in advising AIG to limit its disclosures about billions of dollars it paid to other firms during the height of the financial crisis. Geithner was head of the New York Fed at the time.
"More than one year after the first federal bailout of AIG, the American people continue to question where their tax dollars were really sent when the government rescued this company," Towns said in a statement. "I continue to believe that a comprehensive review of the rise and fall of AIG and the involvement of counterparties can provide a useful vehicle to understanding how inadequate regulations, cheap money, risky business deals, and in some instances, corruption led to the current economic crisis."
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Towns said the hearing will take place the week of Jan. 18. He said he will seek testimony from both Geithner and Baxter. A Treasury spokeswoman declined to comment when asked whether Geithner would testify at the hearing.
"It is critical that we understand if the FRBNY did request the withholding of information and what the extent and nature of the pressure exerted by the FRBNY on AIG may have been," Rep. Elijah Cummings (D-Md.), wrote in asking Towns to investigate further. "In all cases, the money provided by the FRBNY to AIG came from U.S. taxpayers and taxpayers had the right to know at the time the money was being provided how it was to be used."
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Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, also told reporters that he was troubled by the New York Fed's apparent actions regarding AIG's disclosures and would support hearings on the issue.