Robert Willumstad

  • AIG CEO - June 2008 to September 2008
  • Citigroup
  • 2008 - GOV - what was the money used for?
  • FCIC Interview - mp3 

AIG was caught in a vicious circle.

  • The potential for downgrades from the rating agencies and the market fears caused AIG counterparties on a securities lending program and other transactions, not just those related to the credit default swaps, to require AIG to post additional collateral or demand the return of cash or investments, further increasing the need for liquidity.  (p77)

-- Robert Willumstad

2010 0526 - COP - TARP and Other Government Assistance for AIG - [PDF-241p

American International Group, Inc. 2008 Securities Litigation - Document 95 - Complaint - Case 1:08-cv-04772-LTS Filed 05/19/2009 - 307p

  • (p77) - 211. On August 7, 2008, AIG held its 2008 second quarter earnings conference call.
    • On the call, Mr. Willumstad acknowledged that AIG’s risk concentration in the U.S. housing market had been too high: “[Y]ou see again in retrospect much of the problems that have come about have been a concentration of risk in the U.S. housing market both in the investment portfolio and the credit default swap book.”
  • (ii) “I told him I had been doing some planning and doing some stress testing of AIG’s portfolios, and one of the conclusions I came to is if there were a liquidity crisis, particularly in the securities lending program, that that would require a lot of liquidity in a short period of time, potentially, and I thought that the New York Fed would be able to provide some support in that area.” (Willumstad: Trial Tr. 6343:13-24).  <Willumstad, Geithner> (p107)

Starr International Company, Inc. v. The United States - Case 1:11-cv-00779-TCW 

  • Document 428 - PLAINTIFFS’ PROPOSED FINDINGS OF FACT - 573p  - 
  • 2008 0729 - 09:30 AM - 10:30 AM - Meeting w/Robert Willumstad, Chairman & CEO, AIG Location . Mr. Geithner's Office - 1p

2008 0905 - AIG Board of Directors Minutes 9/5/2008 - <All of it> - 5p

  • (p2) - Mr. Willumstad ... said that the markets have not been kind and the Corporation's residential mortgage backed securities portfolio <Securities Lending> and credit default swap portfolio have continued to deteriorate
    • . Mr. Willumstad described the liquidity and capital issues facing the organization...
  • good bank/bad bank structure
  • A discussion followed on the magnitude of the necessary capital raise, and the Corporation's ability to raise enough capital to reduce its exposure in AIGFP or investments. <Securities Lending>
  • (p131) - John Yarmuth - (D-KY) - We’ve had some testimony about the fact that only $60 billion has been drawn down of the $85 billion. What specifically was the $85 billion needed for?
  • (p131-132) - Mr. WILLUMSTAD - (Former AIG CEO) - The $85 billion number was a number that was obviously determined by the Federal Reserve.
    • The $85 billion, I believe, was intended to be a loan to cover liquidity needs inside the company.
    • It’s been characterized before as covering losses which I think is not an accurate representation.
    • Again, the loan was taken down after I left the company, so I can’t be specific about it.
      • But what happens in a crisis of confidence like this and what was happening to AIG was not a question of losses.
      • AIG has had a lot of money borrowed over the years.
      • And when you go through one of these crises, people who have loaned you money in the past stop lending to you.
      • People who give you money or put money on deposit with you want it back; that in another environment, without this crisis of confidence, AIG could have easily met all of those obligations.
      • But when you have a series of counterparties who have decided for reasons of concern about the viability of the company stop doing business with you, the company can no longer meet its obligations.
    • It’s not very much different that if all the consumers of a particular bank showed up 1 day and asked for all of their money back, there’s no bank in America that could provide that.
      • Those dollars of deposits that were given to that bank are loaned out in the communities to small businesses, consumers, credit cards.
      • The whole system is driven around confidence and viability. And once that breaks down, there is no company, certainly in the United States and I think anywhere around the world, that can sustain a run on the institution.

GOV (House) - The Causes and Effects of the AIG Bailout, Panel 2 - [PDF-171p,