AIG Bailout Legality Questioned Inside Fed
“Weeks after rescuing the American International Group with an $85 billion taxpayer loan in late 2008, Federal Reserve Board officials rejected a proposal that would have forced the insurer’s trading partners to return $30 billion in cash that they had received from A.I.G. in the preceding
months. The Fed chose instead to let the banks keep the cash and to receive additional billions from taxpayers. This decision was made, internal documents show, after two Fed governors expressed concern that such a plan might be ‘a gift’ to the company’s trading partners, including Goldman Sachs and Société Générale, a major French bank.” (New York Times, Wednesday)
A glimpse under the rock.
FEE Timely Classic
“The Financial Bailouts: ‘See the Needle and the Damage Done’” by Lawrence H. White
