Thursday, March 05, 2009
The fellas at the Wall Street Journal Real Time Economics blog watched Federal Reserve Vice Chairman Donald Kohn testify before the Senate Banking Committee today so I didn't have to.
Apparently there was only one question: "Where's all the AIG money going?" The answer wasn't forthcoming as described in their report:
“My judgment would be that giving the names would undermine the stability of the company,” Kohn said in a contentious Senate hearing.Now, I did happen to catch that hearing...
It didn’t go over well.
“Public confidence in what we’re doing is at stake, it’s their money that is being poured into these institutions,” Senate Banking Chairman Christopher Dodd, D-Conn., told Kohn. “That kind of an answer undermines that very significantly.”
Kohn’s rejection of the idea contrasts how Bernanke has handled the AIG counterparty question in the past.
According to a transcript of a Nov. 18, 2008, House Financial Services Committee hearing, Rep. Carolyn Maloney, D-N.Y., asked Bernanke, “will you make public who those [AIG] counterparties are and how much they received?”
The Fed chairman was quite agreeable in a "the check's in the mail" sort of way.
Bernanke replied, “I think that information can be made available,” though he noted that AIG had many counterparties. Bernanke added, “we will see what we have.”Those Freedom of Information Act lawsuits by Bloomberg and Fox News should be just about ready to get underway...
In a letter Wednesday to Bernanke, Maloney said she’s still waiting. “To date, your office has not provided that information to me nor, as far as I am aware, to the Financial Services Committee,” Maloney wrote.
Asked about that same issue in a Senate hearing two days ago, Bernanke said AIG counterparties made “legal, legitimate, financial transactions” and normally “would have presumption to privacy about their commercial decisions.”
“So that is a consideration we have to take into account,” Bernanke said, adding “we understand your concern and we want to make sure that we provide all the information that’s needed to make the public policy judgments.”
That’s still a far cry from “no.”
Kohn appeared to finally deliver that Thursday, to much abuse.