Highlights: Geithner testimony at House hearing on AIG

WASHINGTON (BestGrowthStock) – The following are highlights from a House Oversight and Government Reform Committee hearing on Wednesday with Treasury Secretary Timothy Geithner testifying on the bailout of insurance company AIG.

GEITHNER ON AIG DISCLOSURES:

“I had no role in making decisions regarding what to disclose about the specific financial terms of Maiden Lane II and Maiden Lane III, and payments to AIGs counterparties.”

GEITHNER ON PAYING PAR VALUE:

“The counterparties held insurance entitling them to full or par value of the contract. We could not credibly threaten not to pay. That meant putting AIG into bankruptcy. At the time, we were working desperately to rebuild confidence in the financial system. Any suggestion that we might let AIG fail would have worked against that vital aim. We could not risk a protracted negotiation. AIG’s financial position was deteriorating rapidly and the prospect of a downgrade was imminent.”

GEITHNER ON CONSEQUENCES OF AIG FAILURE:

“The steps the government took to rescue AIG were motivated solely by what we believed to be in the best interests of the American people. We did not act because AIG asked for assistance. We did not act to protect the financial interests of individual institutions. We did not act to help foreign banks. We acted because the consequences of AIG failing at that time, in those circumstances, would have been catastrophic for our economy and for American families and businesses.

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Highlights: Geithner testimony at House hearing on AIG