This is an update to two posts, both on July 6, 2010: One on Insurance Claims and Issues Web Log, and one on Insurance Claims and Bad Faith Law Blog.
The Government Accountability Office reports that the New York Fed has some 'splainin' to do. See Binyamin Appelbaum, "Report Says New York Fed Failed to Cut A.I.G. Deals" p. B1, col. 4 (New York Times Nat'l ed., "Business Day" Section, Tuesday, November 1, 2011), differently written in the print edition vs. the version found online at www.nytimes.com.
Among other things, the GAO reports that the New York Fed has been inconsistent in its explanations about how and why it came to be that Federal Taxpayer Funds were used to pay AIG's 'counterparties' 100 cents on the dollar of each and every one of their Credit Default Swap claims against AIG -- even at least one counterparty which told the New York Fed that it would take less.
Apparently, the New York Fed refused to be negotiated down.
The GAO report does not address the mystery of how a complete Release of All Claims by AIG -- even claims not yet made by AIG -- came to pass in favor of all of AIG's counterparties. At least, the linked newspaper article does not mention the mystery. The posts of July 6, 2010 mention this mystery.
There is still no answer to the mystery.
One mystery has been solved, however. (Well, "mystery" may be too strong a word; it is something that at least is not talked about very often.) That is:
Who was in charge of the Federal Reserve Bank of New York when the New York Fed decided to use Federal Taxpayer Money to pay AIG's counterparties 100% of the counterparties' claims against AIG?
He later became Secretary of the Treasury under Mr. Obama. His name, of course, is Timothy Geithner. See id.
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