N.Y. Fed Told AIG Not to Disclose Swap Details

(NEW YORK TIMES) — Starting in November 2008, the Federal Reserve Bank of New York under Timothy Geithner began urging American International Group, the huge insurer that the government had bailed out, to limit disclosure on payments made to banks at the height of the financial crisis, e-mail messages obtained by DealBook show.

The e-mail exchange between the bailed-out insurance giant and its regulator portray a strange reversal of roles, with A.I.G. staff arguing for the disclosure of certain details on payments for credit-default swaps to major banks, only to be discouraged by officials at, or representing, the Federal Reserve.

American International Group, once the biggest insurance company in the United States, had to be bailed out by the Federal Reserve after it collapsed in September 2008 because of commitments it had made to insure mortgage-backed securities. By June of last year, the government’s bill for the bailout totaled $182 billion.

via N.Y. Fed Told A.I.G. Not to Disclose Swap Details – DealBook Blog – NYTimes.com.

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