Geithner’s Fed Made AIG Pay Banks to the Max
Posted on Oct 28, 2009
That Timothy Geithner must love the big banks he spends all day talking to. Back when he was in charge of things, the Federal Reserve Bank of New York forced AIG to pay off Wall Street tycoons for all those toxic bets, even though the mega-insurer was busy trying to negotiate a better deal.
Goldman Sachs alone got $14 billion that will never be recouped by taxpayers, who shelled out $180 billion to keep AIG from going under.
So, despite dodging his taxes, failing to regulate Wall Street as it destroyed the global economy and worrying more about reckless bankers than cash-strapped taxpayers, Geithner got promoted to run the American economy.
How is it that real unemployment is at 17 percent and this guy still has a job? —PZS
The Federal Reserve Bank of New York said Tuesday that it had no choice but to instruct American International Group last November to reimburse the full amount of what it owed to big banks on derivatives contracts, a move that ended months of effort by the insurance giant to negotiate lower payments.
Fed officials offered the explanation in a rare response to a media report after Bloomberg News said that the New York Fed, led at the time by then-President Timothy F. Geithner, directed AIG to make the payments after it received a massive government bailout. The officials said AIG lost its leverage in demanding a better deal once the company had been saved from bankruptcy.
White House / Pete Souza