Bernanke says did not negotiate with AIG lenders

WASHINGTON (BestGrowthStock) – U.S. Federal Reserve Chairman Ben Bernanke said on Wednesday he was not directly involved in negotiations with the counterparties of insurance giant AIG, having delegated the duties to the New York Fed.

The AIG bailouts, which after several rounds totaled about $180 billion, have become a symbol of what many Americans feel was a lopsided approach to financial rescues, favoring big banks at the expense of average citizens.

The New York Fed, then led by current Treasury Secretary Timothy Geithner, has been accused of bungling the negotiations, paying AIG’s lenders in full instead of driving a harder bargain on behalf of U.S. taxpayers.

But Fed chief Ben Bernanke, whose nomination for a second term at the helm of the U.S. central bank is up for a vote this week, said he was not at the forefront of AIG-related discussions.

“I was not directly involved in the negotiations with the counterparties,” Bernanke said in a letter to Representative Darrell Issa, the top Republican in the U.S. House Oversight Committee.

Congress on Wednesday was holding hearings regarding the decisions surrounding the bailouts, and the anger was palpable.

“In effect, the taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse,” said the committee’s chairman, Representative Edolphus Towns, a New York Democrat.

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Bernanke says did not negotiate with AIG lenders