Damon Silvers - (COP Member / Policy Director for the AFL-CIO) 

  • It seems to me that you’re covering for something. (p43)

--  Damon SILVERS, COP Member / Policy Director for the AFL-CIO

2010 1216 - COP - Hearing - Treasury Secretary Timothy Geithner, Congressional Oversight Panel - [PDF-88p, VIDEO-CSPAN]

  • 2010 0526 - COP - Hearing - TARP and Other Government Assistance for AIG, Congressional Oversight Panel  ---  [BonkNote]
    • Damon Silvers - (COP Member / Policy Director for the AFL-CIO) 
    • Tom Baxter - (General Counsel and Executive Vice President of the Legal Group, Federal Reserve Bank of New York)
    • (p104-105) - GICS vs Swaps, CDS
    • (p144) - State Guaranty funds vs Federal (ex. FDIC)
  • 2010 0526 - COP - Hearing - TARP and Other Government Assistance for AIG, Congressional Oversight Panel  ---  [BonkNote]
    • Damon Silvers - (COP Member / Policy Director for the AFL-CIO)
    • Jim Millstein - (Chief Restructuring Officer, U.S. Department of the Treasury)

    • (p218) - Mr. SILVERS. Is it not the case that in the week of September 15, 2008, that the cash calls that the company could not meet were in two lines of business and two lines of business only.
      • And but for those cash calls, none of this would have been necessary?
      • And those two lines of business were, and it depends on what— you know you can believe or not—you can argue I guess with the state insurance regulators, they certainly were the swaps business and they may have been the securities lending business.
      •   And but for those two enterprises, none of this would have occurred? Is that not so?
    • Mr. MILLSTEIN. That is not so.  ---  So let me——
    • Mr. SILVERS. Are you seriously asserting that if you wipe those two pieces of business off the books, that AIG was nonetheless insolvent?
    • Mr. MILLSTEIN. Let me——
    • Mr. SILVERS. And are you accusing the New York State Insurance Commissioner of lying to this panel?
  • 2010 0526 - COP - Hearing - TARP and Other Government Assistance for AIG, Congressional Oversight Panel  ---  [BonkNote]
    • (p144) - Damon SILVERS (COP Member / policy director for the AFL-CIO):  [continuing]. You—it has been represented to us, and I think you heard some of it this morning, that absent what the Fed did and precisely the way it did it, there would have been a crisis for the insurance subsidiaries and their ability to maintain their business, pay their obligations, and the like, a crisis that’s so serious that it was absolutely necessary to rescue the parent in the manner the parent was rescued in order to avoid such an outcome.
      • I think there is a kind of implicit analysis made by the Federal Reserve and the Treasury in saying so, that whatever problems might have arisen in the insured subsidiaries, they would have been beyond the ability of the state insurance regulation and guarantee system to manage.
      • What is your response to both those propositions and specifically what was the view of the New York State Insurance regulators and the—I forget the term of art now, but there’s a sort of coordinating body of state insurance regulators. 
      • What was your view during the so-called Lehman weekend around these questions?
    • Michael MORIARTY (New York State Insurance Department, Deputy Superintendent)
      • Sure. I’d like to bifurcate my answer into two parts.
        • We do not believe that the existing policyholders of the AIG property and casualty companies for sure or even the life insurance companies would have suffered any losses should there—would there have been a bankruptcy of the AIG holding company system.
        • State insurance laws through the McCarran-Ferguson Act clearly give the states the authority to regulate insurance companies and to rehabilitate and liquidate them, which is a different process from a bankruptcy.
        • So we would maintain that the existing policyholders would have been made whole, even if there was a bankruptcy.
        • The life insurance subsidiaries would have suffered significant losses and the cushion, which we call surplus, which is effectively capital between assets and liabilities, would have taken a severe hit, but we still think it would have been positive.
      • Now, when we look at AIG as a going concern that would have been a problem

193. Thomson, supra note 189, at 8–9.
194. For example, Herbert Allison recently claimed before the Congressional Oversight Panel (“COP”) that “[t]here is no ‘too big to fail’ guarantee on the part of the U.S. government.”

Members of the COP responded to Mr. Allison’s claim with derision and disbelief. 

COP member Damon Silvers declared, “I do not understand why it is that the United States government cannot admit what everyone in the world knows.”

Cheyenne Hopkins, Pandit Sees a New Citigroup, But Others aren’t Convinced, AM. BANKER, Mar. 5, 2010, at 1 (noting that Mr. Allison’s claim “angered and baffled the panelists”)

2010 - LR - Reforming Financial Regulation to Address the Too-Big-To- Fail Problem, by Arthur E. Wilmarth, Jr.* - 77p