Federal Reserve chairman asks for US government audit
Federal Reserve chairman Ben Bernanke would “welcome a full review” into the central bank’s 2008 bailout of AIG, the FT reports.
Bernanke, who is waiting to be confirmed for a second term by the US Senate, wrote to Gene Dodaro, acting comptroller general of the Government Accountability Office, Congress’s watchdog of government, on Tuesday to offer support for an inquiry. A copy was published by the Fed.
Some members of Congress want to prevent the Fed from using its emergency lending powers to rescue one company. They want to require the Fed to offer the same terms to a cross-section of companies during a crisis.
Comprehensive response
The Telegraph said Bernanke said he had requested the audit "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."
Bill Dudley, president of the New York Fed, welcomed the audit request, saying: "We are confident that a comprehensive GAO review and the documents we have provided… will clarify the government's role in AIG and underscore the importance of the intervention."
Prevent disorderly failure
Dow Jones quoted Bernanke’s letter: "The Federal Reserve extended this credit to prevent the immediate disorderly failure of the company, an event that likely would have led to a significant intensification of an already severe financial crisis and a further worsening of global economic conditions.”
Reuters said the New York Federal Reserve Bank turned over 250,000 pages of documents to The US House of Representatives Oversight and Government Reform Committee that has scheduled a hearing on the matter next week.
