AIG - Snippets
Attached is a document that summarizes some of our discussion earlier.
- The key takeaway is that AIG could be more systemic in nature than Lehman due to the retail dimension of its business.
- Insolvency should be managed in a way that insulates the retail activity from contagion arising from the wholesale part. Stating the obvious, intervention needs to insulate retail acitivities (inc. those in the parent, like stable value wraps) in a way that inspires confidence among the
public to avoid a potential crisis of confidence.
- Coordination issues among state regulators could make this difficult.
- The counterparty exposure figures you asked for will be sent by Supervision under a seperate cover.
SUbject: Fw: Summary of AIG Bankruptcy Impact. ----- Forwarded by Timothy Geithner/NY/FRS on 09/16/200809:56 AM -----. Alejandro LaTorre/NY/FRS. - 1p
- Situation is a mess -- AIG is open to having someone go over/call in tonight to start the process.
- Any chance you could call in at about 8 pm or so tonight?
- As you can see from this slide, AIGFP has very large notional amounts of exposure related to its Super Senior credit derivative portfolio.
- But because this business is carefully underwritten and structured with very high attachment points to the multiples of expected losses, we believe the probability that it will sustain an economic loss is close to zero. (p4)
2007-12-05 AIG Investor Conference Call Transcript_1.pdf - 66p