Lawmakers seek Fed audit after critical AIG report
http://finance.yahoo.com/news/Lawmakers-seek-Fed-audit-apf-4...
* By Daniel Wagner, AP Business Writer
* On 12:56 pm EST, Wednesday November 18, 2009
WASHINGTON (AP) -- A group of House Democrats are stepping up demands for greater transparency from the Federal Reserve after reports that the Fed mishandled the bailout of insurance giant American International Group Inc.
The group, led by Rep. Elijah Cummings, D-Md., wants a congressional review of the Federal Reserve system. They want to allow congressional audits of the Fed as part of financial rules being debated by the House Financial Services and Senate Banking committees, according to a letter Wednesday to the committees' chairmen.
"Real financial regulatory reform cannot occur without an examination into the structure" of the Federal Reserve system, the letter says.
Details on which banks benefited from AIG's bailout never would have become known without demands from Congress, and a recent report shows flaws in the Fed's structure as a regulator, the lawmakers write.
The letter follows sharp criticism Monday of the Federal Reserve Bank of New York and Federal Reserve in a report from Neil Barofsky, the special inspector general for the $700 billion financial bailout fund. Barofsky said the Fed may have paid billions more than necessary to banks including Goldman Sachs Group Inc. and Merrill Lynch, now part of Bank of America Corp., to cancel AIG's contracts with them.
Treasury Secretary Timothy Geithner, then president of the New York Fed, signed off on decisions that weakened the government's bargaining position and made it difficult to pay the banks less than face value for securities AIG had insured, the report says.
The government has committed up to $180 billion to rescue AIG. Few expect all the money to be recovered. The Treasury Department now owns nearly 80 percent of the New York-based company and is trying to wind down its operations.
rest of article: http://finance.yahoo.com/news/Lawmakers-seek-Fed-audit-apf-4...
Good: Put these people in jail.
Watchdog: Gov't overpaid to bail out AIG
Officials mismanaged AIG bailouts and overpaid to stabilize company, bailout watchdog says
Daniel Wagner, AP Business Writer
6:13 pm EST, Monday November 16, 2009
WASHINGTON (AP) -- Officials managing the multibillion dollar bailout of insurance giant American International Group Inc. bungled the first rescue and may have overpaid other banks to wind down AIG's business relationships, a government watchdog says.
The Federal Reserve Bank of New York -- headed at the time by now Treasury Secretary Timothy Geithner -- paid AIG's business partners face value for securities so they would cancel insurance-like contracts AIG had written and ease the firm's liquidity crunch. But at least one of those partner banks would have canceled the contracts for less, according to a report Tuesday from Neil Barofsky, the Special Inspector General for the $700 billion financial bailout Congress approved last October.
The report says New York Fed officials mismanaged the negotiations with other banks, removing the threat that AIG would go bankrupt and bowing to a demand from French regulators that French banks holding AIG's debt insurance be paid in full.
The initial bailout "was done with almost no independent consideration of the terms of the transaction or the impact that those terms might have on the future of AIG," the report says.
As a result, billions more than necessary went to U.S. banks including Goldman Sachs Group Inc.; Merrill Lynch, now part of Bank of America Corp.; and Wachovia, now part of Wells Fargo & Co.; and European banks including Societe Generale, Deutsche Banke, UBS and Calyon, it says.
Barofsky also faults the Federal Reserve for refusing at first to reveal which banks had received billions of American taxpayer dollars supposedly intended to save AIG. The Fed released the banks' names and the amount of their payoffs only after lawmakers demanded greater transparency.
In its written response, the Treasury Department emphasized that the events "developed extremely quickly"
http://www.dailypaul.com/node/114963
They're just going to
They're just going to replace them with more puppets. We are not fighting corrupt people. We are fighting a corrupt system. As long as the system is unchanged, the story will be the same no matter who holds what office.
None of this matters. This
None of this matters. This is a typical "Problem, Reaction, Solution" drama. They'll end up creating some new regulatory bureaucracy that will end up being even worse than the Fed. The only thing worth debating is what to call it. I propose "The Banana Czar," as a nod toward our ever apparent Banana Republic.
Don't Trust Elijah Cummings - Not One Bit
Mr. Cummings likes to be in the spot light. He was very vocal when the first Bailout bill was voted down in the house, but it was all show when he ultimately voted for it the next time through.
He is a typical politician... Don't get to excited, at least not yet.
Very
Funny..not one mention of Ron Paul. Guess they hijacked the Audit The FED movement too.
Ok by me
All that matters is they do a complete audit. We all know the name of the true bi-partisan leader in this country. History will shine very brightly indeed on Dr Ron Paul no matter what happens.
We know who the credit belongs to
If they feel better taking the credit, let em do it, if it will get HR1207 & S 604 passed
Hey
BTW...what's the status of the gutted HR1207 bill? I haven't heard much about this problem.
see
http://www.dailypaul.com/node/115151
cool
Thanks meek!