Q: AIG - Where Did The Money Go?

  • 2009 0315 - AIG Press Release - AIG Discloses Counterparties To CDS, GIA And Securities Lending Transactions - 6p
  • Hank Greenberg (Former AIG CEO) - FCIC Interview - mp3
    • <78B?>

She explained that most of the money drawn from the facility went to securities lending counterparties. '

  • Dixie asked how much money was drawn from the facility between September 16 and November 10 when the Maiden Lane transactions were announced.
    • Ms. Dahlgren said “north of $60 billion, but I’d have to verify that. (p2)

2010 0430 - FCIC memo of staff interview with Sarah Dahlgren, New York Fed - 5p

  • Exposures to AIGFP
  • 1. CDS written on ABS CDO
    • At the time of the September 16 loan, the notional value of CDS written on ABS

      CDOs was $80 billion.
    • AIG had taken $25 billion of writedowns as of June 30 and had posted $16 billion of collateral, leaving AIG's counterparties with an exposure of $9 billion.
    • ⇒  Systemic risk has fallen since September 16 because AIG has drawn on the Federal Reserve's $85 billion facility to post collateral against this $9 billion.

2008 1103 - FRB - Systemic risks of AIG, FRBNY-TOWNS-R1-122347 - 6p

  • [Bonk: Who wrote this? -   Systemic Risks of AIG, Attachment to e-mail sent from Michael Gibson to Rich Ashton-?, found reference in June COP Report
    • In this memo, I discuss the possible systemic risks from a failure of AIG. The
      particular scenario considered is a bankruptcy filing by AIG, Inc., the parent holding
      company, and AG Financial Products Corp. (AGFP), with AG's insurance subsidiaries
      entering a rehabilitation process overseen by domestic and foreign regulators.
  • 201x - FCIC - 40B - AIGFP, 55B - AIG Securities Lending
  • 2010 0526 - COP - TARP and Other Government Assistance for AIG - New york - 16B went out for Securities Lending Quickly
  • 2017 1013 - CRS - Government Assistance for AIG: Summary and Cost - 22p
  • 2018 0912 - CRS - Costs of Government Interventions in Response to the Financial Crisis: A Retrospective - 45p
  • The domestic subsidiaries lost $17.5 billion in 2008 as a result of their participation in a securities lending program sponsored by its upstream parent, American International Group, lnc. (''AIG").
  • AIG made capital contributions in 2008 to substantially offset these securities lending losses from funds primarily obtained from the U.S. government. (p2/5)

2009 1231 - Examination Report of AIG - AGC Life Insurance Company - Missouri - 25p

  • In an interview, Christopher Swift, vice president for life and retirement services, also told Bloomberg that AIG would inject an undisclosed amount of capital into some of the subsidiaries.

2008 0627 - Reuters - AIG To Lose Up To $5 Billion From Investments: Report - [link]

  • AIG securities lending program. Borrowers that had reliably rolled over their positions from period to period for months began returning the borrowed securities and demanding their cash collateral. From September 12 to September 30, borrowers demanded the return of about $24 billion in cash.

2009 0318 - NAIC / GOV - Joel Ario (PA) - American International Group's Impact on the Global Economy: Before, During, and After Federal Intervention - 12p

  • Mr. POLAKOFF (OTS). Congressman, if I could offer a couple of points for your consideration of the bailout that has occurred.
    • And AIG recently did a press release breaking down the money—$52 billion went for credit default swap-related issues, and $40 billion went for security lending issues.

So there were multiple issues associated with AIG.

In November 2008, Treasury used funding from the Troubled Asset Relief Program (TARP) to inject $40 billion into AIG. The money went mostly to pay down an FRBNY lending facility.  dahlgren-lessons learned??

  • The $40 billion purchase price paid by Treasury under the Capital Purchase Program was immediately “used to pay down the current outstandings on the Fed loan,” also reducing the maximum borrowing limit from $85 billion to $60 billion. Dahlgren, Tr. 2875-76; PTX 622 at 34; PTX 5200.

11-779C - Document 443 - Starr International v United States: Opinion and Order - 75p