Government lawyers had argued Mr Bernanke was too senior and the facts had been raked over too often for his appearance to be necessary.
Judge Thomas Wheeler disagreed. Compelling Mr Bernanke to travel to a Washington law firm to answer questions about the government bailout, he wrote on Monday that the “court cannot fathom having to decide this multibillion-dollar claim without the testimony”.
The claim comes from Hank Greenberg, the former chief executive of AIG, who says he and other shareholders were unfairly diluted when the Federal Reserve Bank of New York took an 80 per cent equity stake in return for $182bn in emergency funding. He is suing the government for compensation.
Judge Wheeler said there were “extraordinary circumstances”, a test of whether senior officials had to give evidence in lawsuits.
In his decision, he wrote: “Mr Bernanke was a central figure in the government’s 2008 determination of how it should handle AIG’s fiscal difficulties. To rule otherwise would deprive the court of important relevant evidence in its fact-finding and resolution of this case.”
The insurer came close to collapse in September 2008 as Lehman Brothers filed for bankruptcy. AIG had written credit default swaps, an insurance against default by subprime mortgage-backed securities, which fell in value as the crisis deepened.
The US provided AIG with more than $182bn in taxpayer funds to stave off collapse in return for a majority stake. In its complaint, Starr International, Mr Greenberg’s vehicle, said the US did so against the wishes of AIG shareholders “without due process or just compensation”. – FT