New York Fed buried AIG public discolsures

What to you guys think: serious breach of ethics and disclosure laws, or an unfortunate, but necessary step to protect market confidence? -stromey, CFA Jan. 7 (Bloomberg) – The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show. AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

Breach, this would have been positive news for the market at the time (the surviving companies were being made whole to the cent by a company that had failed). This was clearly done to prevent public outrage!

Wow, I didn’t know they could do this. Bad news for market transparency.

Clearly there was some sort of favoritism here. So while its good news for GS, it means lets short the crap out of C and BofA instead. I do think it was a breach, when the Govt is stepping in to save the system, they should not need to disclose what is really going, if they did whats the point of saving the system?

Not surprising…given Timothy Geithner likes to hide his taxes record too.