Professor Hillman Comments on AIG Bailout for Bloomberg.com
Professor Robert Hillman commented for Bloomberg.com on efforts by the Federal Reserve Bank of New York to limit disclosures regarding the handling of its bailout of American International Group (AIG), which received a government rescue in 2008 that has cost more than $182 billion.
According to information released to the House Committee on Oversight and Government Reform, AIG was advised by the New York Fed to withhold details about payments to banks on credit-default swaps tied to subprime mortgages in part because it wasn't "precisely accurate" to say the banks were paid in full when "counterparties ultimately received slightly less than 100 percent of par value."
"I don't think this ends the debate as it raises as many questions as it answers," Professor Hillman said. "One has the impression that the Fed would be perfectly happy to leave the identities of those counterparties confidential forever."
Robert Hillman is a Professor of Law and Fair Business Practices and Investor Advocacy Chair at UC Davis and a scholar in the fields of international transactions, securities regulation, and corporate and partnership law.