Lex counsels us that the accusations of a “backdoor bail-out” of AIG towards the end of 2008 are misplaced.
First, US banks had already been subject to a high-profile, front door bail-out. By November, the government was evidently holding the financial system together on multiple fronts. Second, with $85bn in loans already granted to AIG, the Fed could not credibly threaten to let the insurer fail. It could have strong-armed banks into taking a haircut (risking accusations of regulatory over-reach). And, given the French banking regulator’s resistance to its banks taking losses, this could have meant favouring European over US banks…
Whatever. The issue has raw political traction and, with Geithner so publicly on the rack, we all love a leaked document.
Presenting: Schedule A to Amended Shortfall Agreement, obtained by Ryan Grim at The Huffington Post, who (we assume) got if from someone on the House Oversight and Government Reform Committee.
To date the congressional investigation into the AIG bailout has forced publication of a heavily-redacted list of those banks – US and European — who benefited from the decision to take out AIG’s toxic paper at par.
Now, thanks to the HuffPost, we’ve got what seems to be full details, with a breakdown by counterparty, tranche, notional value, collateral, and mark to market details.
Expert analysis of the names and numbers invited below…
Related links:
Schedule A to Amended Shortfall Agreement — Credit & Fixed Income table in the Long Room
[Redacted] – FT Alphaville
AIG and the Fed, not above water, but drowning? – FT Alphaville
The uncomfortable position of UBS – FT Alphaville