by Caitlin Kenney

Bloomberg is reporting that while the New York Fed was led by Timothy Geithner, it asked AIG to withhold documents and delay disclosures about how much it paid banks for credit default swaps. Hugh Son reports:

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

AIG's Dec. 24, 2008, filing was challenged privately by the U.S. Securities and Exchange Commission, which polices the adequacy of disclosures by publicly traded firms. The agency said in a letter to then-CEO Edward Liddy six days later that AIG should provide a Schedule A, which lists collateral postings for the swaps and names the bank counterparties that purchased them from the company. The Schedule A was disclosed about five months later in a filing.

"Our position has always been that if AIG's securities lawyers determine that AIG is legally obligated to make a particular filing or disclosure, then that is what AIG must do," Thomas Baxter, general counsel for the New York Fed, said in a statement. He said it was appropriate for the New York Fed, as party to deals outlined in the filings, "to provide comments on a number of issues, including disclosures, with the understanding that the final decision rested with AIG's securities counsel."

The New York Fed took over negotiations between AIG and the banks in November 2008, just weeks after the giant insurer was bailed out by taxpayers.

BONUS: Felix Salmon on "The Fed's Culture of Secrecy."