{"id":8132,"date":"2013-07-30T11:54:03","date_gmt":"2013-07-30T11:54:03","guid":{"rendered":"http:\/\/praag.org\/?p=8132"},"modified":"2013-07-30T11:54:03","modified_gmt":"2013-07-30T11:54:03","slug":"fed-chairman-to-testify-about-bailout-to-foreign-entities","status":"publish","type":"post","link":"https:\/\/praag.org\/?p=8132","title":{"rendered":"Fed chairman to testify about bailout to foreign entities"},"content":{"rendered":"
\n
\"Ben<\/a>
Ben Bernanke<\/figcaption><\/figure>\n

A judge has ordered Ben Bernanke, the Federal Reserve chairman, to testify about the bailout of AIG<\/span> in a case where the government is accused of illegally appropriating the insurer and using it \u201cto covertly funnel billions of dollars to foreign entities\u201d.<\/div>\n

\n

Government lawyers had argued Mr Bernanke was too senior and the facts had been raked over too often for his appearance to be necessary.<\/p>\n

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 \u201ccourt cannot fathom having to decide this multibillion-dollar claim without the testimony\u201d.<\/p>\n

\n

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.<\/p>\n

\n

Judge Wheeler said there were \u201cextraordinary circumstances\u201d, a test of whether senior officials had to give evidence in lawsuits.<\/p>\n

\n

In his decision, he wrote: \u201cMr Bernanke was a central figure in the government\u2019s 2008 determination of how it should handle AIG\u2019s fiscal difficulties. To rule otherwise would deprive the court of important relevant evidence in its fact-finding and resolution of this case.\u201d<\/p>\n

\n

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.<\/p>\n

\n

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\u2019s vehicle, said the US did so against the wishes of AIG shareholders \u201cwithout due process or just compensation\u201d. – FT<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

A judge has ordered Ben Bernanke, the Federal Reserve chairman, to testify about the bailout of AIG in a case where the government is accused of illegally appropriating the insurer and using it \u201cto covertly funnel billions of dollars to foreign entities\u201d. Government lawyers had argued Mr Bernanke was too senior and the facts had … Continue reading “Fed chairman to testify about bailout to foreign entities”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":8133,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,3,10],"tags":[4482,4481,3258,4483,745],"class_list":["post-8132","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-and-finance","category-news","category-united-states","tag-aig","tag-bailout","tag-ben-bernanke","tag-federal-reserve-bank","tag-usa"],"cc_featured_image_caption":{"caption_text":false,"source_text":false,"source_url":false},"jetpack_featured_media_url":"https:\/\/praag.org\/wp-content\/uploads\/2013\/07\/bernanke.jpg","_links":{"self":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/8132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8132"}],"version-history":[{"count":1,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/8132\/revisions"}],"predecessor-version":[{"id":8134,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/8132\/revisions\/8134"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/media\/8133"}],"wp:attachment":[{"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}