Federal Reserve Bank of New York
(Hat tip, Sharyn)
Bloomberg reported yesterday that during the high point of our financial crisis, the Federal Reserve Bank of NY urged AIG to keep secret information about its payments to banks. The payments included AIG’s agreement to repay $62.1B (100 cents to the dollar) for toxic assets; money ultimately repaid by the taxpayers. The NY Fed was led by Tim Geithner at the time, and there are emails to substantiate the story.
The emails were obtained by the Office of Rep Darrell Issa (R-Cal), a ranking member of the House Oversight & Government Reform Committee. In a circulated statement, Rep Issa said: “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information to the SEC.” Since the committee received more than 1,000 pages of documents from AIG, it is likely more of the story will unfold in the days ahead.
While the Securities Exchange Commission was asking AIG for transparency, Bloomberg reporter Hugh Son shows in his riveting story that the NY Fed and its lawyers were telling the company “mums the word”. Why was that? What made them do it?