If you don't want to, don't have the time to, or simply cannot understand the gobbledygook in Vice Chairman Donald Kohn's speech on AIG in front of the Senate Committee on Banking, Housing, and Urban Affairs, don't worry, because it looks like all the action happened in the Q&A anyway:
Officials shouldn't reveal which Wall Street firms pocketed billions of dollars in the government's bailout of AIG, a top Federal Reserve official said.
Firms that did business with the troubled insurer did so "expecting confidentiality," Fed Vice Chairman Donald Kohn told the Senate Banking Committee in testimony Thursday.
He said publishing a list of the firms that benefited from government support of AIG -- as lawmakers have been demanding -- could undermine trust in the markets and increase financial instability.
"I would be very concerned if we started revealing lists of names of companies that did transactions" with AIG or with the government on AIG's behalf, Kohn said in response to questions. Doing so, Kohn added, could "undermine confidence" in the financial system.
And a bit later in the article....
"I wasn't worried so much about the counterparties," Kohn said. "I was worried about other U.S. institutions operating in the markets."
But senators warned that a failure to identify the AIG trading partners could damage the administration's standing on Capitol Hill.
"We have put in approximately $170 billion to $180 billion into one corporation, and you are telling us the counterparties that got par for their bonds or whatever -- the American taxpayer shouldn't know who they are?" asked Sen. Jim Bunning, R-Ky.
Bunning warned that without a full accounting of how taxpayer money has been spent, further requests for financial bailouts will result in "the biggest zero you have ever seen." RW: I think that the Senators are slightly peeved. Why not? The problem is - regardless of whether or not the Fed reveals the names of companies that partook in the AIG deals or not - nobody knows with any degree of certainty "what would have happened if AIG failed". There is one confidential government report out there, but regardless, what we do know is that this is big - far bigger than what the government had first anticipated.