Federal Reserve chairman Ben Bernanke said Tuesday he “would welcome” a congressional probe into the controversial government bailout of insurance giant AIG during the financial crisis.
Bernanke said the Fed had already made public much information about actions related to the 2008 AIG bailout, adding that the central bank and the Treasury “acted in the best interests of the United States.”
In a letter to the General Accountability Office, the investigative arm of Congress, he said that a “full review” of the issue was appropriate.
“In this spirit, to afford the public the most complete possible understanding of our decisions and actions in this matter, and to provide a comprehensive response to questions that have been raised by members of Congress, the Federal Reserve would welcome a full review by GAO of all aspects of our involvement in the extension of credit to AIG, the statement said.
The Federal Reserve said in a statement that it “will make available” to the GAO “all records and personnel necessary” to conduct the review.
The GAO is the audit, evaluation, and investigative arm of Congress.
The move came after US Treasury Secretary Timothy Geithner agreed to testify before a congressional hearing on the bailout involving more than 170 billion dollars, especially payments made to AIG’s trading partners.
The House of Representatives Oversight and Government Reform Committee said last week that internal AIG emails obtained by the panel to date “indicate that the (New York Fed) may have urged AIG to keep secret the details of the counterparty payments, despite the fact that taxpayer dollars made the payments possible.”
The panel last week subpoenaed documents on the bailout, including from Geithner, who was president of the Federal Reserve Bank of New York before his current appointment.
Geithner said he would testify before the House panel on January 27, stressing that he was not involved in any decision related to the disclosure of details about the terms of the bailout.
The New York Fed had also said it would provide any relevant material to the congressional panel.
Panel chairman Edolphus Towns said his committee was seeking information on payments made to AIG counterparties — major global banks including Goldman Sachs, Morgan Stanley, Barclays, Bank of America, Deutsche Bank, and Societe Generale.
