From: To: Subject: Date

:

(b) (4)
Patrick.M.Parkinson@frb.gov; terrence.checki@ny.frb.org; spence.hilton@ny.frb.org Our biggest worry here 09/12/2008 07:10 AM

AIG traded up to 755 for 5 yr CDS---t our head of overall credit trading -(b) (4)

(b) (4)

the one that worries the most. (b) (4)

(b) (4)

(b) (4)

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From: To: Subject: Date:

Patrick M Parkinson Brian Madigan AIG 09/12/2008 09:10 AM

Sounds like they are getting nervous. Pat

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From: To: Subject: Date:

Brian.F.Madigan@frb.gov Patrick.M.Parkinson@frb.gov Re: AIG 09/12/2008 09:30 AM

Do you have some text on this?

Patrick.M.Parkins on@frb.gov To 09/12/2008 09:10 AM

"Brian Madigan" <brian.f.madigan@frb.gov> cc Subject AIG

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From: To: Subject: Date:

Patrick M Parkinson Brian F Madigan Re: AIG 09/12/2008 09:32 AM

No. TFG related on conference call. Firm is expecting downgrade, worried about liquidity.

----- Original Message ----From: Brian.F.Madigan Sent: 09/12/2008 09:30 AM AST To: Patrick Parkinson Subject: Re: AIG

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From: To: Subject: Date:

(b) (4)
Chris.Burke@ny.frb.org; william.dudley@ny.frb.org; gustavo.a.suarez@frb.gov RE: I am getting a lot of questions from Investors about AIG 09/12/2008 10:13 AM

It kinda feels like the market is melting down again for financials. Govt RP now bid at 2.40/offered at 2.30.
_____________________________________________ From: To:

(b) (4)
'Chris.Burke@ny.frb.org'; ' (william.dudley@ny.frb.org)' I am getting a lot of questions from Investors about AIG High

Sent: Friday, September 12, 2008 9:30 AM Subject: Importance:

**Besides the repo market very sloppy today, I am getting investors coming in asking me if AIG is having any trouble rolling their CP. Just fyi. Their stock is getting hit hard this morning again I believe Repo under huge upward pressure this morning due most likely to the LEH situation. I am sure you saw the stops yesterday in the repos that generated a huge spike in repo into the close yesterday, so starting out very high today with market fears of funding. Just fyi
(b) (4)

BOG-- FOIA 10-251 --000005

From: To: Cc: Subject: Date:

Deborah P Bailey William B English Jon D Greenlee Re: AIG 09/12/2008 12:00 PM

Bill, I passed your email on to Jon Greenlee. I am not sure but Jon may have some folks working on something ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc Subject

Deborah P Bailey/BOARD/FRS@BOARD AIG

09/12/2008 11:55 AM

DeborahDo you guys have an expert on AIG? I thought I would ask before asking one of my folks to look into them, just to be sure we are not duplicating work. Thanks, Bill E.

BOG-- FOIA 10-251 --000006

From: To: Cc: Subject: Date:

Jon D Greenlee Deborah P Bailey William B English Re: AIG 09/12/2008 12:55 PM

Bill, We don't have an expert on the company, but I do believe we have done some work on their credit exposures. I will see what we have and share it with you. Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Deborah P Bailey/BOARD/FRS
Deborah P Bailey/BOARD/FRS

To cc Subject

William B English/BOARD/FRS@BOARD Jon D Greenlee/BOARD/FRS Re: AIG

09/12/2008 12:00 PM

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From: To: Subject: Date:

Jon D Greenlee Sabeth I Siddique Fw: AIG 09/12/2008 12:58 PM

Anyone in your group know much about AIG? I imagine we've looked at some of their credit exposures but not much else. Is there anything we can share? Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Deborah P Bailey/BOARD/FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/12/2008 12:57 PM -----

To cc Subject

William B English/BOARD/FRS@BOARD Jon D Greenlee/BOARD/FRS Re: AIG

09/12/2008 12:00 PM

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From: To: Subject: Date:

(b) (4)
Chris.Burke@ny.frb.org; william.dudley@ny.frb.org; gustavo.a.suarez@frb.gov RE: I am getting a lot of questions from Investors about AIG: Update 09/12/2008 01:05 PM

Investors are heading for the exits in CP on Aig, I am beeing asked to bid back multiple pieces of Aig Funding CP from multiple investors. This is not going very well.(Their stock is below $13 I believe)
Duplicate

BOG-- FOIA 10-251 --000009

From: To: Subject: Date:

Maria G Perozek William B English Re: AIG 09/12/2008 01:10 PM

Hi Bill--I have been completely swamped with forecast issues, so I am afraid I am not going to be much help at the moment on recent developments at AIG. After my memo goes out this afternoon, I will do some research and get back to you. Best, Maria ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc Subject

Maria G Perozek/BOARD/FRS@BOARD AIG

09/12/2008 11:56 AM

Hi MariaWhat do you know about AIG? Have you produced memos on them anytime recently? They appear to be under much more stress in the past few days, and I would like to know more about them. Thanks, Bill E.

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From: To: Subject: Date:

Gustavo A Suarez JNellie Liang; Daniel M Covitz Fw: I am getting a lot of questions from Investors about AIG: Update 09/12/2008 01:14 PM

(b) (4)

AIG.

reports that several investors are asking her to bid back on CP issued by

----- Forwarded by Gustavo A Suarez/BOARD/FRS on 09/12/2008 01:13 PM -----

(b) (4)
To 09/12/2008 01:05 PM <Chris.Burke@ny.frb.org>, <william.dudley@ny.frb.org>, <gustavo.a.suarez@frb.gov> RE: I am getting a lot of questions from Investors about AIG: Update

cc Subject

Investors are heading for the exits in CP on Aig, I am beeing asked to bid back multiple pieces of Aig Funding CP from multiple investors. This is not going very well.(Their stock is below $13 I believe)
Duplicate

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From: To: Cc: Subject: Date:

JNellie Liang Patrick Parkinson; Brian Madigan Gustavo Suarez Fw: I am getting a lot of questions from Investors about AIG: Update 09/12/2008 01:22 PM

Take this with a grain of salt, but is refle ---------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld ▼ Gustavo A Suarez ----- Original Message ----From: Gustavo A Suarez Sent: 09/12/2008 01:14 PM EDT To: JNellie Liang; Daniel Covitz Subject: Fw: I am getting a lot of questions from Investors about AIG: Update (b) (4) reports that several investors are asking her to bid back on CP

issued by AIG.

Duplicate

BOG-- FOIA 10-251 --000012

From: To: Cc: Subject: Date:

Patrick M Parkinson JNellie Liang; Brian F Madigan Gustavo A Suarez Re: I am getting a lot of questions from Investors about AIG: Update 09/12/2008 01:23 PM

Consistent with other rumblings. Pat

----- Original Message ----From: JNellie.Liang Sent: 09/12/2008 01:22 PM AST To: Patrick Parkinson; Brian Madigan Cc: Gustavo Suarez Subject: Fw: I am getting a lot of questions from Investors about AIG: Update

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From: To: Subject: Date: Importance:

Patrick.M.Parkinson@frb.gov brian.f.madigan@frb.gov; michael.s.gibson@frb.gov AIG 09/12/2008 03:00 PM High

Trish Mosser just called. AIG is coming to FRBNY this afternoon. Evidently they have a huge hole and are worried about downgrades, liquidity problems. Source of hole is credit derivatives. She will call later with details. I may or may not be going to NY, perhaps later today but more likely tomorrow morning. So I am going to point Trish in your direction. Pat

BOG-- FOIA 10-251 --000014

From: To: Cc: Subject: Date:

Fabio M Natalucci Roberto Perli Fabio M Natalucci AIG collateral posting in case of a downgrade--based on their Aug 6 10-Q 09/12/2008 04:20 PM

A significant portion of AIGFP’s guaranteed investment agreements (GIAs) and financial derivative transactions include provisions that require AIGFP, upon a downgrade of AIG’s long-term debt ratings, to post collateral or, with the consent of the counterparties, assign or repay its positions or arrange a substitute guarantee of its obligations by an obligor with higher debt ratings. It is estimated that, as of the close of business on July 31, 2008, based on AIGFP’s outstanding municipal GIAs and financial derivative transactions at that date, a downgrade of AIG’s long-term senior debt ratings to ‘A1’ by Moody’s Investors Service (Moody’s) and ‘A+’ by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (S&P), would permit counterparties to make additional calls for up to approximately $13.3 billion of collateral, while a downgrade to ‘A2’ by Moody’s and ‘A’ by S&P would permit counterparties to call for approximately $1.2 billion of additional collateral. If either of Moody’s or S&P downgraded AIG’s ratings to ‘A1’ or ‘A+’, respectively, the estimated collateral call would be for up to approximately $10.5 billion, while a downgrade to ‘A2’ or ‘A’, respectively, by either of the two rating agencies would permit counterparties to call for up to approximately $1.1 billion of additional collateral. Furthermore, a downgrade of AIG’s long-term senior debt ratings to ‘A1’ by Moody’s or to the same levels by both rating agencies would permit either AIG or the counterparties to elect early termination of contracts resulting in payments of up to approximately $4.6 billion, while a downgrade to ‘A2’ by Moody’s and ‘A’ by S&P would permit either AIG or the counterparties to elect early termination of additional contracts resulting in additional payments of up to approximately $800 million. AIGFP believes that it is unlikely that certain of these counterparties would exercise their rights to elect termination of their contracts given the substantial economic benefit that such counterparties would forfeit upon termination. The actual amount of collateral that AIGFP would be required to post to counterparties in the event of such downgrades, or the aggregate amount of payments that AIG could be required to make, depends on market conditions, the fair value of outstanding affected transactions and other factors prevailing at the time of the downgrade. Additional obligations to post collateral or the costs of assignment, repayment or alternative credit support would increase the demands on AIG’s liquidity. Further downgrades could result in requirements for substantial additional collateral, which could have a material adverse effect on AIG’s liquidity.

BOG-- FOIA 10-251 --000015

From: To: Subject: Date:

Fabio M Natalucci Roberto Perli Bloomberg story on AIG 09/12/2008 04:23 PM

AIG May Announce Its Turnaround Plan Before Sept. 25 (Update2) By Hugh Son and Shannon D. Harrington Sept. 12 (Bloomberg) -- American International Group Inc., the largest U.S. insurer, may accelerate plans to raise capital or sell assets after the shares plunged 42 percent this week, said a person familiar with the company. Chief Executive Officer Robert Willumstad may announce the turnaround plan before his Sept. 25 deadline said the person, who declined to be named because the New York-based insurer hasn't made an official statement. AIG may be able to raise $20 billion selling assets including its consumer finance, reinsurance and plane-leasing units, according to analysts at Citigroup Inc. AIG shares slumped and the cost of insuring its debt rose to a record today on concern that the company may be the next big U.S. financial firm after Lehman Brothers Holdings Inc. to run short of capital. AIG spokesman Joe Norton declined to comment on the reorganization plans. ``It's a carbon-copy story for a lot of these guys that need capital,'' said Robert Bolton, managing director for trading at Mendon Capital Advisors Corp. in Rochester, New York. ``It's unprecedented that two storied franchises, Bear Stearns and Lehman, have taken on the type of water they have, and now there are fears about another titan, AIG.'' AIG dropped $4.61, or 26 percent, to $12.94 at 3:29 p.m. in New York Stock Exchange composite trading. The price of credit- default swaps, used as hedges against losses on bad debt, approached distressed levels and traded higher than those for Lehman, the securities firm that's fighting for survival. Raising Capital The insurer raised $20.3 billion in May by selling debt and equity, diluting the holdings of long-time investors. It's ``very hard to predict'' if AIG will need more capital, Willumstad said Aug. 7. ``As distressed as they are, raising new capital could be extremely hard,'' said Tim Backshall, chief strategist at Credit Derivatives Research LLC in Walnut Creek, California, today in an e-mail.
BOG-- FOIA 10-251 --000016

The insurer disclosed in an Aug. 6 filing that a ratings cut may have ``a material adverse effect on AIG's liquidity.'' The company was forced to put up $16.5 billion in collateral through July 31 for investors who bought protection from AIG through credit-default swaps. The firm reported about $25 billion in writedowns in three previous quarters on the swaps. The contracts backed $441 billion of assets as of June 30, including $57.8 billion in securities tied to subprime mortgages. Credit-Default Swaps Most of the valuation declines on the swaps will reverse and AIG may have to pay $8.5 billion on the contracts in a worst-case scenario, the company said Aug. 7. American General Finance, AIG's consumer lender, could fetch more than $6 billion if the unit sold for twice its book value. AIG Investments could sell for more than $3 billion if it sold for 2.5 percent of clients' assets under management. The stake in reinsurer Transatlantic Holdings Inc. is worth about $2.4 billion, based on the Sept. 10 share price. Bank of America Corp. analyst Alain Karaoglan said Willumstad should reconsider the decision to keep its aircraft- leasing unit, which could sell for $7 billion to $14 billion.

BOG-- FOIA 10-251 --000017

From: To: Subject: Date:

(b) (4)
Chris.Burke@ny.frb.org; william.dudley@ny.frb.org; gustavo.a.suarez@frb.gov AIG: Update 09/12/2008 05:22 PM

I am sure you saw, S&P put Aig ratings on NEG WATCH for downgrade. I think this along with their Stock/CDS price action today will shut them out of CP on Monday given the investor nervousness I saw today. News sources saying AIG may have some conference call Monday, so we will see what happens.
(b) (4)

BOG-- FOIA 10-251 --000018

From: To: Subject: Date:

Gustavo A Suarez JNellie Liang; Daniel M Covitz; Patrick M Parkinson Fw: AIG: Update 09/12/2008 05:25 PM

----- Forwarded by Gustavo A Suarez/BOARD/FRS on 09/12/2008 05:24 PM -----

(b) (4)
To 09/12/2008 05:22 PM <Chris.Burke@ny.frb.org>, <william.dudley@ny.frb.org>, <gustavo.a.suarez@frb.gov> AIG: Update

cc Subject

I am sure you saw, S&P put Aig ratings on NEG WATCH for downgrade. I think this along with their Stock/CDS price action today will shut them out of CP on Monday given the investor nervousness I saw today. News sources saying AIG may have some conference call Monday, so we will see what happens.

(b) (4)

BOG-- FOIA 10-251 --000019

From: To: Cc: Subject: Date:

Deborah P Bailey Patrick M Parkinson Brian F Madigan; Scott Alvarez; Jon D Greenlee Re: AIG 09/12/2008 05:35 PM

There is a big concern. I did tell the Chairman and vice chairman because the President of AIG said that he was planning to call the Chairman and vice chairman re: 13-3 loan. We are working on background of the Co. AIG is under the OTS. The (b) (8) holding company is a The thrift is The ratings on this was May 08.
(b) (8)

Brian, the vice chair asked that you include me on the Saturday call? Thanks -------------------------Sent from the Blackberry of Deborah Bailey ▼ Patrick M Parkinson ----- Original Message ----From: Patrick M Parkinson Sent: 09/12/2008 05:18 PM EDT To: Deborah Bailey Subject: Re: AIG

I've heard. One FRBNY staffer thinks it's in worse shape than LB. Brian Madigan said there is concern about its ability to make payments on Monday.

Pat ▼ Deborah P Bailey/BOARD/FRS
Deborah P Bailey/BOARD/FRS

To cc Subject

Patrick M Parkinson/BOARD/FRS@BOARD AIG

09/12/2008 05:16 PM

NY Fed talked with them. It's not good. I am on the call but call me when you are done. -------------------------Sent from the Blackberry of Deborah Bailey

BOG-- FOIA 10-251 --000020

From: To: Subject: Date:

Michael S Gibson Patrick M Parkinson Re: AIG 09/12/2008 05:35 PM

Are you still waiting for Trish to call? If it is important for me to stay here to talk to Trish, I can stay, but I do have some things to take care of at home tonight. Just let me know. FYI, I looked at AIG's Q2 earnings presentation. They have taken cumulative MTM writedowns of $25 billion on super senior ABS CDOs ($80 billion notional). They have posted $16.5 billion of collateral. Their CSAs do have rating-based triggers for collateral. For them as for others, MTM writedowns will become realized losses as the CDOs liquidate, which (market-wide) is happening gradually. MG ▼ Patrick.M.Parkinson@frb.gov
Patrick.M.Parkinson@frb.gov To 09/12/2008 03:00 PM cc Subject AIG brian.f.madigan@frb.gov, michael.s.gibson@frb.gov

Duplicate

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From: To: Subject: Date:

Patrick M Parkinson Michael S Gibson Re: AIG 09/12/2008 05:38 PM

You will get an email later. You probably will be invited to a meeting tomorrow. They are in terrible shape, possibly worse than Lehman! The losses are at the derivative products sub. Pat ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To cc Subject

Patrick M Parkinson/BOARD/FRS@BOARD

Re: AIG

09/12/2008 05:35 PM

Duplicate

BOG-- FOIA 10-251 --000022

From: To: Subject: Date:

Lyle Kumasaka Brian F Madigan; James A Clouse; William B English; William R Nelson; Roberto Perli AIG FSB 09/12/2008 05:39 PM

RESTRICTED FR AIG FSB is a federally chartered thrift headquartered in Wilmington DE (3rd Dist). Total Assets: $1.3 billion (June 2008) (b) (8) CAMELS comp.
(b) (8)

Has borrowing docs but no collateral. DLOD cap: $57 mil.

BOG-- FOIA 10-251 --000023

From: To:

Cc: Subject: Date: Attachments:

Patricia Mosser Timothy Geithner; Brian F Madigan; Patrick M Parkinson; Jon D Greenlee; Deborah P Bailey; Arthur Angulo; William Dudley; William Rutledge; Sarah Dahlgren; Brian Peters; Meg McConnell; Thomas Baxter; Michael S Gibson jim.mahoney@ny.frb.org AIG meeting this afternoon 09/12/2008 05:44 PM AIG Meeting Notes.doc

Restricted FR 2 AIG Meeting Notes September 12, 2008 AIG – Jacob Frenkel (Vice Chairman), Steve Bensinger (CFO), David Herzog (SVP & Comptroller), Robert Gender (VP & Treasurer), Alan Pryor (EVP – Financial Services Division) FRBNY – Trish Mosser, Jim Mahoney, Bill Dudley AIG is facing serious liquidity issues that threaten its survival viability. There are potential credit rating agency downgrades. Moody’s Committee meets on Monday September 15 (currently rated AA3, downgraded at least one notch)… S&P already has AIG on negative watch (as of today)… Fitch already has AIG on negative watch. Rating triggers: GICs are issued out of AIG-Financial Products (AIG-FP), insured by the holding company. downgrade by 1 rating agency leads to $10B in collateral calls, plus an additional $4B-$5B in portfolio obligations that are puttable if downgraded (total of $15B in liquidity needs) downgrade by 2 rating agencies – additional $3B in liquidity needs If downgraded, they must post half of the additional collateral within 2 days, and the other half in 10 days. Markets are also punishing AIG. Stock prices are off about 40% today, and CDS is traded at about 1400 bp (up from about 10 bp eighteen months ago). Some banks are already pulling away; some banks are even turning down AIG in the secured (repo) borrowing markets AIG is having problems rolling its commercial paper (CP). $2.5B in CP matured today, but they were able to roll only $1.1B, the remaining $1.4B was funded out of the parent. AIG has a total of about $15B in CP, which has backstop (backup lines of credit) from a consortium of banks; AIG may have to draw on lines on Monday, which is a material event and so will become publicly known and have negative implications. AIG also has ABCP facilities of about $5B, and these have no backup lines
BOG-- FOIA 10-251 --000024

AIG’s repo book is all investment grade, mostly structured mortgage products…. Things that have, in the past, been used as repo collateral... but the combination of being perceived as a weak counterparty and risky, illiquid collateral is resulting in counterparties stepping away…. Securities lending (mostly out of the insurance companies) – about $69B in liabilities, and the holding company has only enough cash to fund ½ of that, if the sec lending counterparties turn away from the AIG name. Mobility of liquidity – most cash within the organization is ‘trapped’ in regulated entities and is not freely transferable to AIG holding company or AIG Financial Products (the derivatives and trading sub) for its liquidity needs. Today, the holding company started with $9B in liquidity, used $1.4 for CP, but was able to upstream about $1.4B in ‘dividends’ from subs up to holding company, but little ability, in general, to use subs to upstream liquidity to holding co or its nonregulated subs. Bottom line: Treasurer estimates that parent and AIG FS sub have 5-10 days before they are out of liquidity. Plans to address liquidity stress? AIG is aggressively pursuing: Asset sales – but many viable assets to sell have distressed and illiquid markets into which to sell Equity issuance – not viable at this time – 3 months ago, AIG raised $20B in capital. It is all gone. Holding company has about $12B in ‘Fed-eligible’ assets (that is, PDCF collateral… note, however, this does not include the restriction on assets that have ‘available prices’) The various insurance subs have very large quantity of high quality assets, but the restrictions on pledging those are very unclear. Unwinding in event of bankruptcy is likely to be very messy, because derivatives book is large and complex $2.7 Trillion, largely of very long-term structure products. $1 Trillion is concentrated in 12 large counterparties. Book is very far from balanced, although they could not give a MTM value. One of the challenges they are already facing is very aggressive marks from counterparties and strategic unwinding of “in the money” positions, and this will likely accelerate in coming days adding to the cash drain. Their super senior CDO book is about $80 bn and at present they have approximately $19 billion in collateral posted against it. Access to Fed facilities: They have what they describe as a very small thrift, and so limited ability to borrow from DW. Recently they drew up a plan to become a primary dealer over a 6-12 month period, but obviously do not have the time to implement that plan. They explicitly asked about how to obtain an IPC 13-3 loan. They are very willing to open their books to us, and give us a better sense of their risk profile, the complexity of their book and detailed liquidity profile as soon as possible (ie this weekend.)

BOG-- FOIA 10-251 --000025

BOG-- FOIA 10-251 --000026

Restricted FR AIG Meeting Notes September 12, 2008 AIG – Jacob Frenkel (Vice Chairman), Steve Bensinger (CFO), David Herzog (SVP & Comptroller), Robert Gender (VP & Treasurer), Alan Pryor (EVP – Financial Services Division) FRBNY – Trish Mosser, Jim Mahoney, Bill Dudley

AIG is facing serious liquidity issues that threaten its survival viability. There are potential credit rating agency downgrades. Moody’s Committee meets on Monday September 15 (currently rated AA3, downgraded at least one notch)… S&P already has AIG on negative watch (as of today)… Fitch already has AIG on negative watch. Rating triggers: GICs are issued out of AIG-Financial Products (AIG-FP), insured by the holding company. - downgrade by 1 rating agency leads to $10B in collateral calls, plus an additional $4B-$5B in portfolio obligations that are puttable if downgraded (total of $15B in liquidity needs) - downgrade by 2 rating agencies – additional $3B in liquidity needs - If downgraded, they must post half of the additional collateral within 2 days, and the other half in 10 days. Markets are also punishing AIG. Stock prices are off about 40% today, and CDS is traded at about 1400 bp (up from about 10 bp eighteen months ago). Some banks are already pulling away; some banks are even turning down AIG in the secured (repo) borrowing markets AIG is having problems rolling its commercial paper (CP). $2.5B in CP matured today, but they were able to roll only $1.1B, the remaining $1.4B was funded out of the parent. AIG has a total of about $15B in CP, which has backstop (backup lines of credit) from a consortium of banks; AIG may have to draw on lines on Monday, which is a material event and so will become publicly known and have negative implications. AIG also has ABCP facilities of about $5B, and these have no backup lines AIG’s repo book is all investment grade, mostly structured mortgage products…. Things that have, in the past, been used as repo collateral... but the combination of being perceived as a weak counterparty and risky, illiquid collateral is resulting in counterparties stepping away….

BOG-- FOIA 10-251 --000027

1

Restricted FR

Securities lending (mostly out of the insurance companies) – about $69B in liabilities, and the holding company has only enough cash to fund ½ of that, if the sec lending counterparties turn away from the AIG name. Mobility of liquidity – most cash within the organization is ‘trapped’ in regulated entities and is not freely transferable to AIG holding company or AIG Financial Products (the derivatives and trading sub) for its liquidity needs. Today, the holding company started with $9B in liquidity, used $1.4 for CP, but was able to upstream about $1.4B in ‘dividends’ from subs up to holding company, but little ability, in general, to use subs to upstream liquidity to holding co or its non-regulated subs. Bottom line: Treasurer estimates that parent and AIG FS sub have 5-10 days before they are out of liquidity. Plans to address liquidity stress? AIG is aggressively pursuing: - Asset sales – but many viable assets to sell have distressed and illiquid markets into which to sell - Equity issuance – not viable at this time – 3 months ago, AIG raised $20B in capital. It is all gone. - Holding company has about $12B in ‘Fed-eligible’ assets (that is, PDCF collateral… note, however, this does not include the restriction on assets that have ‘available prices’) - The various insurance subs have very large quantity of high quality assets, but the restrictions on pledging those are very unclear. Unwinding in event of bankruptcy is likely to be very messy, because derivatives book is large and complex $2.7 Trillion, largely of very long-term structure products. $1 Trillion is concentrated in 12 large counterparties. Book is very far from balanced, although they could not give a MTM value. One of the challenges they are already facing is very aggressive marks from counterparties and strategic unwinding of “in the money” positions, and this will likely accelerate in coming days adding to the cash drain. Their super senior CDO book is about $80 bn and at present they have approximately $19 billion in collateral posted against it. Access to Fed facilities: They have what they describe as a very small thrift, and so limited ability to borrow from DW. Recently they drew up a plan to become a primary dealer over a 6-12 month period, but obviously do not have the time to implement that plan. They explicitly asked about how to obtain an IPC 13-3 loan. They are very willing to open their books to us, and give us a better sense of their risk profile, the complexity of their book and detailed liquidity profile as soon as possible (ie this weekend.)

BOG-- FOIA 10-251 --000028

2

From: To: Cc: Subject: Date:

Patricia Mosser Michael S Gibson; jim.mahoney@ny.frb.org; Jon D Greenlee Patrick M Parkinson followup with AIG 09/12/2008 05:47 PM

Jon and Mike, Given how dire the situation with AIG is, Jim and I thought we should probably follow up to get more information on their risk profile, etc. sometime tomorrow. They will make available to us the appropriate people. Sorry to wreck your weekend, but what times would work for you?? (Jim and I have given up --- we know we are here for the duration.) Thanks Trish

BOG-- FOIA 10-251 --000029

From: To: Cc: Subject: Date:

Gustavo A Suarez JNellie.Liang@frb.gov Gustavo A Suarez Re: I may need some help AIG 09/12/2008 06:22 PM

Nellie, Sorry I missed your call. I gathered some basic facts about unsecured CP by AIG and its 3 sponsored ABCP programs and gave them to Dan and Bill English. If there is a change of plans. I can be reached by email over the weekend or at Gustavo
(b) (6)

.

▼ JNellie.Liang@frb.gov
JNellie.Liang@frb.gov To 09/12/2008 06:04 PM cc Subject Re: I may need some help AIG Gustavo.A.Suarez@frb.gov

Thanks, I think we're free for the weekend.

Monday might be hectic.

Gustavo.A.Suarez@ frb.gov To 09/12/2008 05:24 JNellie.Liang@frb.gov PM cc

Subject Re: I may need some help AIG

BOG-- FOIA 10-251 --000030

Happy to help. I will be around about one more hour and will be checking email from home after that.

JNellie.Liang@frb.gov

09/12/2008 05:22 PM To "Gustavo Suarez" <Gustavo.A.Suarez@frb.gov> cc

Subject I may need some help AIG

What time are you leaving? --------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000031

From: To: Cc: Subject: Date:

Patricia Mosser Jon D Greenlee Ms. Deborah P Bailey; Jim Mahoney; Michael S Gibson; Patrick M Parkinson Re: followup with AIG 09/12/2008 06:24 PM

Situation is a mess -- AIG is open to having someone go over/call in tonight to start the process. Any chance you could call in at about 8 pm or so tonight? ▼ Jon D Greenlee/BOARD/FRS@BOARD
Jon D Greenlee/BOARD/FRS@BOARD

To cc

Michael S Gibson/BOARD/FRS@BOARD, Patricia Mosser/NY/FRS@FRS Jim Mahoney/NY/FRS@FRS, Patrick M Parkinson/BOARD/FRS@BOARD, "Ms. Deborah P Bailey" <Deborah.P.Bailey@FRB.Gov> Re: followup with AIG

09/12/2008 06:03 PM

Subject

I have an 11 AM call and one at 1 PM, but I can miss those if necessary. Thanks Jon -------------------------Sent from my BlackBerry Wireless Handheld ▼ Michael S Gibson ----- Original Message ----From: Michael S Gibson Sent: 09/12/2008 05:49 PM EDT To: Patricia Mosser Cc: Jim Mahoney; Jon Greenlee; Patrick Parkinson Subject: Re: followup with AIG

Hi Trish,

Tomorrow morning is fine for me. Afternoon is not as good but I could make time for a call. Mike ▼ Patricia Mosser/NY/FRS@FRS
Duplicate

BOG-- FOIA 10-251 --000032

From: To: Subject: Date: Attachments:

William R Nelson Deborah P Bailey; Brian F Madigan; James A Clouse; Daniel M Covitz; William B English; Gustavo A Suarez some additional info on AIG 09/12/2008 06:24 PM aig moodys.pdf aig Individual Firm Information.htm

Moody's report is very recent (mid August), so may be useful background.

Here is the important instution webpage from MFST's website. It should also be available on shared umbrella group cite, but I don't know exactly where. I'm not sure if this will actually be readable. this is the link, but Deborah, you will not be able to get to it, I think. http://www.rsma.frb.gov/dma/fst/SR/Restricted/aigsum.html --Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000033

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aig: Individual Firm Information

MFST | Important Institutions
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file:///L|/2010/251/Documents/aig%20Individual%20Firm%20Information htm[10/25/2010 5:08:20 PM]

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file:///L|/2010/251/Documents/aig%20Individual%20Firm%20Information htm[10/25/2010 5:08:20 PM]

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file:///L|/2010/251/Documents/aig%20Individual%20Firm%20Information htm[10/25/2010 5:08:20 PM]

From: To: Cc: Subject: Date:

Jon D Greenlee Patricia Mosser Deborah P Bailey; Jim Mahoney; Michael S Gibson; Patrick M Parkinson Re: followup with AIG 09/12/2008 06:26 PM

Trish, I am available. Jon -------------------------Sent from my BlackBerry Wireless Handheld ▼ Patricia Mosser ----- Original Message ----From: Patricia Mosser Sent: 09/12/2008 06:27 PM EDT To: Jon Greenlee Cc: Deborah Bailey; Jim Mahoney; Michael Gibson; Patrick Parkinson Subject: Re: followup with AIG

Situation is a mess -- AIG is open to having someone go over/call in tonight to start the process. Any chance you could call in at about 8 pm or so tonight?
Duplicate

BOG-- FOIA 10-251 --000043

From: To: Cc: Subject: Date: Attachments:

Deborah P Bailey Donald L Kohn; Randall S Kroszner; Kevin Warsh; Elizabeth A Duke (b) (6) Scott Alvarez; Roger Cole Fw: AIG meeting this afternoon 09/12/2008 06:31 PM AIG Meeting Notes.doc
(b) (8

The consolidated supervisor is OTS. The holding company is rated (b) (8) the thrift a (b) (8) (b) (8) and a trust company Talking to the OTS now....
(b) (8)
----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/12/2008 06:06 PM ----Patricia Mosser/NY/FRS@FRS

To

09/12/2008 05:44 PM

Timothy Geithner/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Arthur Angulo/NY/FRS, William Dudley/NY/FRS, William Rutledge/NY/FRS@FRS@NY, Sarah Dahlgren/NY/FRS, Brian Peters/NY/FRS, Meg McConnell/NY/FRS@FRS, Thomas Baxter/NY/FRS, Michael S Gibson/BOARD/FRS@BOARD jim.mahoney@ny.frb.org AIG meeting this afternoon

cc Subject

Duplicate

BOG-- FOIA 10-251 --000044

From: To: Cc: Subject: Date: Attachments:

Brian F Madigan James A Clouse; William B English; William R Nelson; Richard Perl; Daniel M Covitz; Gustavo A Suarez Brian F Madigan AIG 09/12/2008 06:33 PM AIG Meeting Notes.doc

Restricted Controlled (FR)
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/12/2008 06:31 PM ----Patricia Mosser/NY/FRS@FRS

To

09/12/2008 05:44 PM

Timothy Geithner/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Arthur Angulo/NY/FRS, William Dudley/NY/FRS, William Rutledge/NY/FRS@FRS@NY, Sarah Dahlgren/NY/FRS, Brian Peters/NY/FRS, Meg McConnell/NY/FRS@FRS, Thomas Baxter/NY/FRS, Michael S Gibson/BOARD/FRS@BOARD jim.mahoney@ny.frb.org AIG meeting this afternoon

cc Subject

Restricted FR 2 AIG Meeting Notes September 12, 2008
Duplicate

BOG-- FOIA 10-251 --000045

From: To: Cc: Subject: Date:

Patricia Mosser jim.mahoney@ny.frb.org; Alejandro LaTorre; Catherine Voigts; Jon D Greenlee; Paul Whynott; Michael S Gibson Brian Peters; Deborah P Bailey AIG 09/12/2008 06:43 PM

working on getting hold of the right people -- risk managers, liquidity/Treasury guys and derivatives senior guys in London and Connecticut -- but are pretty sure they can do this tonight at 8 pm. Some will be on site and some will call in. Jacob will be getting back to me with confirmation shortly. Will forward as soon I hear from them..

BOG-- FOIA 10-251 --000046

From: To: Cc: Subject: Date:

Patricia Mosser Catherine Voigts Alejandro LaTorre; Brian Peters; Deborah P Bailey; Jim Mahoney; Jon D Greenlee; Michael S Gibson; Paul Whynott Re: AIG 09/12/2008 07:00 PM

We are on for 8 pm at AIG. I will send names over so they can let you in. Hosts of meeting are: Jacob Frenkel, Vice Chm Steven Bensinger, Vice Chm, AIG financial services, and CFO Call-in information: 1-866-703-9405 code: 963870 ▼ Catherine Voigts/NY/FRS
Catherine Voigts/NY/FRS

To

09/12/2008 06:52 PM cc Subject

Patricia Mosser/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Paul Whynott/NY/FRS@FRS, Michael S Gibson/BOARD/FRS@BOARD Brian Peters/NY/FRS@FRS, Deborah P Bailey/BOARD/FRS@BOARD Re: AIG

Pat Coming in from CT _ shall I go ahead and commit to gettimg car service and head in? Cathy ------------------------Sent from my BlackBerry 917-208-0504 ▼ Patricia Mosser ----- Original Message ----From: Patricia Mosser Sent: 09/12/2008 06:47 PM EDT To: Jim Mahoney; Alejandro LaTorre/NY/FRS@FRS@NY; Catherine Voigts; Jon Greenlee; Paul Whynott; Michael Gibson Cc: Brian Peters; Deborah Bailey

Duplicate

BOG-- FOIA 10-251 --000047

From: To: Cc: Subject: Date:

Patricia Mosser Catherine Voigts Alejandro LaTorre; Brian Peters; Deborah P Bailey; Jim Mahoney; Jon D Greenlee; Michael S Gibson; Paul Whynott Re: AIG 09/12/2008 07:01 PM

Meeting is at AIG, 70 Pine Street. ▼ Catherine Voigts/NY/FRS
Duplicate

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From: To: Subject: Date: Attachments:

William R Nelson William B English Fw: AIG 09/12/2008 09:44 PM AIG Meeting Notes.doc

What can I do to help at this point. I called Brian an hour ago and he was on a conference call. Do you know what that was about? Also, do you think he meant to send this to Richard Perl, or did he just perhaps mistype "perli"? I was thinking of sending it to Robero. bn Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

----- Forwarded by William R Nelson/BOARD/FRS on 09/12/2008 09:43 PM ----Brian F Madigan/BOARD/FRS

To

09/12/2008 06:33 PM cc Subject

James A Clouse/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Richard Perl/NY/FRS@FRS, Daniel M Covitz/BOARD/FRS@BOARD, Gustavo A Suarez/BOARD/FRS@BOARD Brian F Madigan/BOARD/FRS@BOARD AIG

Restricted Controlled (FR)
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/12/2008 06:31 PM ----Patricia Mosser/NY/FRS@FRS

To

09/12/2008 05:44 PM

Timothy Geithner/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Arthur Angulo/NY/FRS, William Dudley/NY/FRS, William Rutledge/NY/FRS@FRS@NY, Sarah Dahlgren/NY/FRS, Brian Peters/NY/FRS, Meg McConnell/NY/FRS@FRS, Thomas Baxter/NY/FRS, Michael S Gibson/BOARD/FRS@BOARD jim.mahoney@ny.frb.org AIG meeting this afternoon

cc Subject

Restricted FR 2 AIG Meeting Notes
Meeting Notes are Duplicates
BOG-- FOIA 10-251 --000049

From: To: Subject: Date:

Jon D Greenlee William B English AIG Call 09/12/2008 09:52 PM

Not a lot new from Trish's note. Some more details on counterparties and derivatives. They expect a ratings downgrade early next week, they plan to draw on their backup lines which will give them enough liquidity to get them to the 26th or 29th. They expect if counterparties begin to pull away, it will happen quickly and they could be run out of liquidity in a couple of days. Counterparties are pulling away and they can't add borrowing capacity. Trapped liquidity is a big issue. They have spoken with NY State insurance commissioner about ways to get money out of insurance sub. They are investigating, but cash is there to protect policy holders. Probably only feasible if Fed lends to isnurance sub and they can move it to the HC (can't repo). They have some capacity to move cash out, but only about $3 billion or so, but subs don't have cash and are having trouble selling assets. $68 billion in Sec Lending business - worry is about rolling it over. Business is in the insurance sub referenced above. They can't sustain a large amount of withdrawals. There isn't really a contingency plan. Pvt equity was discussed (due dil starting tomorrow), sale of businesses, etc. - would need bridge financing. They are a large issuer of annuities that can be put back. Could be as much as over $100 billion. They have ops overseas that could be afected - UK and Japan, but they also own banks in Poland, Hong Kong, and other locations. Derivatives book is huge, they sponsor some ETFs (commodities) and they have a lot of counterparties. Most worried about behavior of counterparties and whether there could be an acceleration of payments without netting. Concentration is in 12 major internationally active banks that are the most active in the derivative market. They are a member of CLS but a significant amount of their business is not done through CLS. FRBNY is getting the detailed reports. Brian Madigan was on the call as well. Jon

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

BOG-- FOIA 10-251 --000050

From: To: Subject: Date:

Brian F Madigan Patrick M Parkinson AIG 09/12/2008 10:55 PM

We (NY and Board staff) had a conf call with AIG this evening. The situation seems very serious. I will be filling Don in shortly. Board staff will be meeting at 8 a.m. and then briefing the Chairman.

BOG-- FOIA 10-251 --000051

From: To: Subject: Date: Attachments:

William R Nelson Roberto Perli Fw: AIG 09/12/2008 11:34 PM AIG Meeting Notes.doc

I'm sure Brian meant to send this to you and not Richard Perl. What should we do? If AIG doesn't have collateral they can pledge to us, I just don't think we can lend. It seems like it would have to be the Treasury. If we think the entity is insolvent, can you think of anyway to make the failure more orderly? Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

----- Forwarded by William R Nelson/BOARD/FRS on 09/12/2008 11:30 PM ----Brian F Madigan/BOARD/FRS

To

09/12/2008 06:33 PM cc Subject

James A Clouse/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Richard Perl/NY/FRS@FRS, Daniel M Covitz/BOARD/FRS@BOARD, Gustavo A Suarez/BOARD/FRS@BOARD Brian F Madigan/BOARD/FRS@BOARD AIG

Restricted Controlled (FR)
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/12/2008 06:31 PM ----Patricia Mosser/NY/FRS@FRS

To

09/12/2008 05:44 PM

Timothy Geithner/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Arthur Angulo/NY/FRS, William Dudley/NY/FRS, William Rutledge/NY/FRS@FRS@NY, Sarah Dahlgren/NY/FRS, Brian Peters/NY/FRS, Meg McConnell/NY/FRS@FRS, Thomas Baxter/NY/FRS, Michael S Gibson/BOARD/FRS@BOARD jim.mahoney@ny.frb.org AIG meeting this afternoon

cc Subject

Restricted FR 2 AIG Meeting Notes
Meeting Notes are Duplicates
BOG-- FOIA 10-251 --000052

From: To: Subject: Date:

Meg.McConnell@ny.frb.org Kevin Warsh Fw: Update on AIG 09/12/2008 11:52 PM

Fyi, in case today wasn't depressing enough... -------------------------Margaret M. McConnell Federal Reserve Bank of New York 212-720-8773

----- Original Message ----From: Alejandro LaTorre Sent: 09/12/2008 11:48 PM EDT To: Christine Cumming; Timothy Geithner; William Dudley; William Rutledge; Arthur Angulo; Brian Peters; Meg McConnell; Dianne Dobbeck; Michael Nelson; Sandy Krieger; Michael Silva Cc: Patricia Mosser; Catherine Voigts; Paul Whynott; Jim Mahoney Subject: Update on AIG We met with senior executives at AIG to discuss both their liquidity and risk exposure situation. These included the CEO, CFO, General Counsel, Treasurer and many others. Below are the important highlights ... Scott Alvarez, Deborah Bailey, Jim Clouse, Mike Gibson and Brian Madigan from the BoG also participated. The key takeaway is that they are potentially facing a severe run on their liquidity over the course of the next several (approx. 10) days if they are They anticipate downgrades downgraded by Moodys and S&P early next week. could happen as early as Monday. Their risk exposures are concentrated among the 12 largest international banks (both U.S. and European) across a wide array of product types (bank lines, derivatives, securities lending, etc.) meaning their could be significant counterparty losses to those firms in the event of AIG's failure. They estimate that they might have to pay out $18.6B across the firm over the course of next week if they were downgraded. I. Liquidity

Breakdown of the $18.6B is: Failed rolls on ABCP: $4.7B Collateral posting on Muni GICs: $6B Collateral posting on Structured Lease GICs: $3B Collateral posting in derivatives contracts: $5B As of close of business today, they have $8B in cash at the holding company. They are experiencing significant difficulties in rolling their programs and have used some of their holding company cash to pay down the rolls. Their CP lines are backstopped by banks and if they were to draw down, this would mean banks have to fund $15B in credit. They expressed concern that banks might object to fund and take legal recourse to prevent from doing so; or more likely they would restrict credit on other exposures (e.g., trading lines). They also have $4.7B in ABCP programs which are not backstopped. They have enough liquidity to last until Sept. 26th. Outside of the holding co., the insurance subs have about $68B in securities lending liabilities to the 12 largest firms. Program is managed by the holding company (AIG Financial Products). In principle they could use these assets for repo: in practice they do not believe that repo of assets is viable b/c the assets are mostly non-agency mortgages and not very desirable. They have lending facilities from the insurance subsidiary to the holding company of $4.9B. They discussed with NYSID Superintendent Dinallo whether they could free up liquidity in excess of the $4.9B to the holding co. Some of the subs have large muni and corporate portfolios that would have to be sold to free up liquidity, meaning not all have excess liquidity. They suggested that Dinallo was amenable to freeing up more liquidity.

BOG-- FOIA 10-251 --000053

They have so far made about $1B in collateral postings on derivatives over the past week; 1 bank has also cut down their overdraft lines limiting their ability to move funds across legal entities. They have no concrete plans to generate near-term liquidity and longer-term plans in their early stages. These longer term plans include a private equity capital raise coupled with asset sales. Interested parties would be performing due diligence starting tomorrow and into sunday. They are also large issuers of annuities and have $11B of contingent exposure in their domestic retirement services business. These are retail but run by large sponsors who could encourage accounts to put back the annuities in exchange for cash if they lose confidence in AIG. These sponsors are U.S. banks who have exposure elsewhere. This could be on top of the $18B payout above. They have similar exposures in Japan but could not quantify the size. They also have a sterling-denominated money market account of $10B and an exchange traded fund in commodities with $3B (run by a sponsor) in liquidity that could also face a run if there is a loss of confidence II. Risk Exposure

$2.7 trillion in notional derivatives exposure across all books across 12 major dealers. Commodities: index book of $25B; swaps on futures contracts where they are long futures contracts to hedge; post variation margin of approx. $2B to NYMEX; also trade options on indices both plain vanilla and structured. Also have positions in precious and industrial metals. CDS: Mostly ABS CDO (not pay as you go, but accelerate at default); $42B High Grade; $60B Mezz.; $20B in CMBS CDOs. Underlying consists mostly of RMBS 2005 vintage across ratings. Material net notionals of $305B in Investment Grade Corp. mortgage and corporate exposures combined. arbitrage another $55B; $1.5trillion of exposure to European banks through balance sheet CDOs. IR derivatives: USD/EUR/Yen denominated. $3B-$4B in size. Very little negative convexity; long long-dated volatility, short short-dated volatility; Long american exercise, short european exercise. FX: they have prime brokerage of $30B in volumes and they clear through CLS. International Leasing Corp; commercial aircraft leasing to over 140 airlines of $50B; rolling CP has been difficult. Also have smaller consumer finance companies and banks across the world ...... Jim, Trish, Paul, Cathy: if I've missed something or mischaracterized something, let us know. Regards, Alex

BOG-- FOIA 10-251 --000054

From: To: Cc: Subject: Date: Attachments:

William B English Brian F Madigan James A Clouse; Roberto Perli; William B English; William R Nelson Background on AIG 09/13/2008 02:24 AM AIG background.pdf

BrianAttached is the promised memo. I found very little on the derivatives activities of AIG, which is frustrating. They don't seem to say much in the 10-Ks/10-Qs. I will check again in the am. Thanks, Bill E.

BOG-- FOIA 10-251 --000055

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American International Group, Inc. and Subsidiaries

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEET

(in millions) (unaudited)

June 30, 2008 Assets: Investments and Financial Services assets: Fixed maturity securities: Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 – $393,170) Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) Bond trading securities, at fair value Equity securities: Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) Common and preferred stocks trading, at fair value Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) Mortgage and other loans receivable, net of allowance (2008 – $99; 2007 – $77) (held for sale: 2008 – $30; 2007 – $377 (amount measured at fair value: 2008 – $745) Financial Services assets: Flight equipment primarily under operating leases, net of accumulated depreciation (2008 – $11,359; 2007 – $10,499) Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) Trading securities, at fair value Spot commodities, at fair value Unrealized gain on swaps, options and forward transactions, at fair value Trade receivables Securities purchased under agreements to resell, at fair value in 2008 Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale: 2008 – $36; 2007 – $233) Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) Short-term investments (amount measured at fair value: 2008 – $24,167) Total Investments and Financial Services assets Cash Investment income due and accrued Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) Current and deferred income taxes Deferred policy acquisition costs Investments in partially owned companies Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 – $5,446) Separate and variable accounts, at fair value Goodwill Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) Total assets
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$ 393,316 21,632 8,801 17,306 22,514 2,496 34,384

$ 397,372 21,581 9,982 17,900 21,376 2,370 33,727

43,887 1,205 35,170 90 11,548 2,294 16,597 33,311 59,530 62,029 69,492 835,602 2,229 6,614 20,050 22,940 8,211 46,733 628 5,692 73,401 10,661 17,115 $1,049,876

41,984 40,305 4,197 238 12,318 672 20,950 31,234 75,662 58,823 51,351 842,042 2,284 6,587 18,395 23,103 — 43,914 654 5,518 78,684 9,414 17,766 $1,048,361

1

BOG-- FOIA 10-251 --000059

American International Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET
(in millions, except share data) (unaudited)

(continued)

June 30, 2008 Liabilities: Reserve for losses and loss expenses Unearned premiums Future policy benefits for life and accident and health insurance contracts Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) Other policyholders’ funds Commissions, expenses and taxes payable Insurance balances payable Funds held by companies under reinsurance treaties Current income taxes payable Financial Services liabilities: Securities sold under agreements to repurchase (amount measured at fair value: 2008 – $8,338) Trade payables Securities and spot commodities sold but not yet purchased, at fair value Unrealized loss on swaps, options and forward transactions, at fair value Trust deposits and deposits due to banks and other depositors (amount measured at fair value: 2008 – $240) Commercial paper and extendible commercial notes Long-term borrowings (amount measured at fair value: 2008 – $53,839) Separate and variable accounts Securities lending payable Minority interest Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) Total liabilities Preferred shareholders’ equity in subsidiary companies Commitments, Contingencies and Guarantees (See Note 6) Shareholders’ equity: Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2008 – 2,948,038,001; 2007 – 2,751,327,476 Additional paid-in capital Payments advanced to purchase shares Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock Total shareholders’ equity Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$

88,747 28,738 147,232 265,411 13,773 5,597 5,569 2,498 —

$

85,500 27,703 136,387 258,459 12,599 6,310 4,878 2,501 3,823

9,659 1,622 3,189 24,232 6,165 15,061 163,577 73,401 75,056 11,149 31,012 971,688 100

8,331 6,445 4,709 14,817 4,903 13,114 162,935 78,684 81,965 10,422 27,975 952,460 100

7,370 9,446 — 73,743 (3,903) (8,568) 78,088 $1,049,876

6,878 2,848 (912) 89,029 4,643 (6,685) 95,801 $1,048,361

2

BOG-- FOIA 10-251 --000060

American International Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in millions, except per share data) (unaudited)

Three Months Ended June 30, 2008 2007 Revenues: Premiums and other considerations Net investment income Net realized capital losses Unrealized market valuation losses on AIGFP super senior credit default swap portfolio Other income Total revenues Benefits and expenses: Incurred policy losses and benefits Insurance acquisition and other operating expenses Total benefits and expenses Income (loss) before income taxes (benefits) and minority interest Income taxes (benefits) Income (loss) before minority interest Minority interest Net income (loss) Earnings (loss) per common share: Basic Diluted Dividends declared per common share Average shares outstanding: Basic Diluted
See Accompanying Notes to Consolidated Financial Statements.

Six Months Ended June 30, 2008 2007 $ 42,407 11,682 (12,170) (14,672) 6,717 33,964 34,332 19,652 53,984 (20,020) (6,894) (13,126) (36) $(13,162) $ $ (5.11) (5.11) $39,175 14,977 (98) — 7,741 61,795 32,367 16,928 49,295 12,500 3,405 9,095 (688) $ 8,407 $ $ 3.22 3.21

$21,735 6,728 (6,081) (5,565) 3,116 19,933 18,450 10,239 28,689 (8,756) (3,357) (5,399) 42 $ (5,357) $ (2.06) $ (2.06) $ 0.220 2,605 2,605

$19,533 7,853 (28) — 3,792 31,150 16,221 8,601 24,822 6,328 1,679 4,649 (372) $ 4,277 $ $ 1.64 1.64

$ 0.200 2,602 2,613

$ 0.420 2,575 2,575

$ 0.365 2,607 2,621

3

BOG-- FOIA 10-251 --000061

From: To: Subject: Date:

Brian F Madigan William B English Re: Background on AIG 09/13/2008 05:24 AM

Thanks, Bill. Could you send me the Word document? Brian ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc

Brian F Madigan/BOARD/FRS@BOARD James A Clouse/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD Background on AIG

09/13/2008 02:24 AM Subject

Duplicate

BOG-- FOIA 10-251 --000062

From: To: Subject: Date:

Brian F Madigan Scott Alvarez; Deborah P Bailey AIG 09/13/2008 07:36 AM

Scott and Deborah, Do we have any responsibility, or is it in the Board's interest, to notify any other supervisors (U.S. or foreign) about the current issues regarding the firm? Brian

BOG-- FOIA 10-251 --000063

From: To: Subject: Date:

Alejandro.LaTorre@ny.frb.org Brian Madigan Fw: Update on AIG 09/13/2008 07:42 AM

Brian, Below is the quick note I drafted for Bill. Tim and others about the meeting last night. Regards, Alex Sent from my BlackBerry Handheld

Duplicate

BOG-- FOIA 10-251 --000064

From: To: Cc: Subject: Date:

Brian F Madigan Scott Alvarez; Deborah P Bailey; James A Clouse; William B English; Michael S Gibson; William R Nelson; Roberto Perli; Patrick M Parkinson Brian F Madigan Fw: Update on AIG 09/13/2008 07:57 AM

----- Forwarded by Brian F Madigan/BOARD/FRS on 09/13/2008 07:52 AM ----Alejandro.LaTorre@ny.frb.org To 09/13/2008 07:42 AM cc Subject Fw: Update on AIG "Brian Madigan" <Brian.F.Madigan@frb.gov>

Brian, Below is the quick note I drafted for Bill. Tim and others about the meeting last night. Regards, Alex Sent from my BlackBerry Handheld

Duplicate

BOG-- FOIA 10-251 --000065

From: To: Cc: Subject: Date:

Alejandro LaTorre Scott Alvarez Brian Peters; Dianne Dobbeck; Millie Martinez Re: Material - As per Alex LaTorre 09/13/2008 08:04 AM

Scott; I have Jacob's information email: jacob.frankel@aig.com Tel: 212-770-8860 (b) (6) Cell: Regards, Alex ▼ Scott Alvarez/BOARD/FRS@BOARD
Scott Alvarez/BOARD/FRS@BOARD

To cc

Millie Martinez/NY/FRS@FRS Alejandro LaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS Re: Material - As per Alex LaTorre

09/13/2008 07:59 AM Subject

Millie, Thanks. Can we also get the contact information? It would be good to know who was at the meeting and who Brian and I should contact, since at least Jacob is expecting one of us to call. Thanks! Scott ▼ Millie Martinez/NY/FRS@FRS
Millie Martinez/NY/FRS@FRS

To cc

Scott Alvarez/BOARD/FRS@BOARD Alejandro LaTorre/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Brian Peters/NY/FRS@FRS Material - As per Alex LaTorre

09/12/2008 10:56 PM

Subject

BOG-- FOIA 10-251 --000066

[attachment "DOC20080912224308.pdf" deleted by Alejandro LaTorre/NY/FRS] [attachment "DOC20080912224106.pdf" deleted by Alejandro LaTorre/NY/FRS] [attachment "DOC20080912224133.pdf" deleted by Alejandro LaTorre/NY/FRS] [attachment "DOC20080912224156.pdf" deleted by Alejandro LaTorre/NY/FRS] [attachment "DOC20080912224157.pdf" deleted by Alejandro LaTorre/NY/FRS] [attachment "DOC20080912224232.pdf" deleted by Alejandro LaTorre/NY/FRS]

BOG-- FOIA 10-251 --000067

From: To: Subject: Date:

Brian F Madigan

(b) (6)
AIG 09/13/2008 08:07 AM

Mr. Chairman, Staff participated in a call yesterday evening in which AIG further briefed us on the firm's situation. The firm is requesting a loan from the Federal Reserve. We are in the office this morning analyzing the situation. We will brief you soon. Brian

BOG-- FOIA 10-251 --000068

From: To: Subject: Date:

Patrick M Parkinson Brian F Madigan; Deborah Bailey Re: Update on AIG 09/13/2008 08:11 AM

Obvious question is what major bank counterparties think their exposures are. Given market awareness of AIG's prblems, I see no reason not to ask the banks. Pat ▼ Brian F Madigan ----- Original Message ----From: Brian F Madigan Sent: 09/13/2008 07:57 AM EDT To: Scott Alvarez; Deborah Bailey; James Clouse; William English; Michael Gibson; William Nelson; Roberto Perli; Patrick Parkinson Cc: Brian Madigan Subject: Fw: Update on AIG
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/13/2008 07:52 AM ----Alejandro.LaTorre@ny.frb.org To 09/13/2008 07:42 AM cc Subject Fw: Update on AIG "Brian Madigan" <Brian.F.Madigan@frb.gov>

Brian, Below is the quick note I drafted for Bill. Tim and others about the meeting last night. Regards, Alex Sent from my BlackBerry Handheld

Duplicate

BOG-- FOIA 10-251 --000069

From: To: Subject: Date:

Deborah P Bailey Patrick M Parkinson; Brian F Madigan Re: Update on AIG 09/13/2008 08:37 AM

Pat, we got it last night. -------------------------Sent from the Blackberry of Deborah Bailey

----- Original Message ----From: Patrick.M.Parkinson Sent: 09/13/2008 08:11 AM AST To: Brian Madigan; Deborah Bailey Subject: Re: Update on AIG

Obvious question is what major bank counterparties think their exposures are. Given market awareness of AIG's prblems, I see no reason not to ask the banks. Pat

Duplicate

BOG-- FOIA 10-251 --000070

From: To: Subject: Date:

Scott Alvarez

(b) (6)
Re: Conf call at 10 am 09/13/2008 08:46 AM

. FYI, there is a call with the foreign supervisors at 9. Deborah will be on that call Brian and I will stop by within the hour to discuss AIG with you Scott -------------------------Sent from my BlackBerry Wireless Handheld (b) (6) ▼
(b) (5)

----- Original Message -----

(b) (6) From: Sent: :41 AM EDT To: Scott Alvarez; Brian Madigan; Patrick Parkinson Cc: Donald Kohn Subject: Conf call at 10 am

To brief foreign cent banks. I will take in my ofc. Optional. Let me know if you need number.
(b) (5) Scott, -------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000071

From: To: Cc: Subject: Date:

Donald L Kohn Timothy Geithner; Kevin Warsh

(b) (6)
AIG 09/13/2008 10:00 AM

Staff has been in contact with AIG (Jacob) this morning. AIG sees this as a liquidity event and has investment bankers looking at assets this weekend but will not sell off core assets and is not seeking a major equity injection or strategic partner. they face the possibility of a multi-grade downgrade ffrom Moody's on Monday, which would probably be the death knell. They were vague as to what they expected from (b) (5) us except that it sounded like an open ended liquidity facility. AIG will get back to us later this morning with a more specific request for us and a more specific plan for raising cash and capital. they are (b) (5) talking to the insurance commisioners at 10.

BOG-- FOIA 10-251 --000072

From: To: Subject: Date:

Donald L Kohn Scott Alvarez; Brian Madigan; Deborah Bailey Fw: AIG 09/13/2008 10:03 AM

Meant to cc you on this. -------------------------Sent from my BlackBerry Wireless Handheld ▼ Donald L Kohn ----- Original Message ----From: Donald L Kohn Sent: 09/13/2008 10:00 AM EDT To: ner; Kevin Warsh (b) (6) Cc: Subj

Duplicate

BOG-- FOIA 10-251 --000073

From: To: Cc: Subject: Date:

Brian F Madigan Scott Alvarez Donald L Kohn AIG 09/13/2008 10:10 AM

Scott, Jacob Frenkel just called. He will call back to my office with someone named Williamson at 11:00 a.m. to discuss their efforts to sell assets. Is that time OK with you? Brian

BOG-- FOIA 10-251 --000074

From: To: Subject: Date:

Scott Alvarez Brian F Madigan Re: AIG 09/13/2008 10:11 AM

Yes. I'll come to your office. Scott ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To cc Subject

Scott Alvarez/BOARD/FRS@BOARD Donald L Kohn/BOARD/FRS@BOARD AIG

09/13/2008 10:10 AM

Duplicate

BOG-- FOIA 10-251 --000075

Calendar Entry

Notify me Mark Private Update on AIG Solvency / 1-888-808-6929 / Access Code: 9494579# / Participation Code: 6133# Starts Sat 09/13/2008 02:00 PM 03:00 PM 1 hour Where Rooms Invited The following invitees have been invited Categorize Reserved Chair Pencil In

Meeting
Subject

Carol Grunwald/NY/FRS Location

When

Ends

Sat 09/13/2008

The following have been requested M9 MKT Central Meeting Room 1/NY Main Building@FRS

Specify a different time zone

Invitees

Adam Ashcraft/NY/FRS@FRS, Alejandro Required (to) LaTorre/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Christopher

Description

Your Notes

BOG-- FOIA 10-251 --000076

From: To: Subject: Date:

Patricia Mosser Brian F Madigan AIG call now 09/13/2008 11:02 AM

Any chance I could call in and listen to AIG's discussion with you?

BOG-- FOIA 10-251 --000077

From: To: Cc: Subject: Date:

(b) (6)
Donald L Kohn Kevin Warsh; Timothy Geithner Re: AIG 09/13/2008 11:13 AM

(b) (5)

▼ Donald L Kohn/BOARD/FRS
Donald L Kohn/BOARD/FRS

To cc Subject

Timothy Geithner/NY/FRS@FRS, Kevin Warsh/BOARD/FRS@BOARD

09/13/2008 10:00 AM

(b) (6)
AIG

Duplicate

BOG-- FOIA 10-251 --000078

From: To: Subject: Date:

James A Clouse William B English; William R Nelson Fw: Update on AIG Solvency / 1-888-808-6929 / Access Code: 9494579# / Participation Code: 6133# 09/13/2008 11:21 AM

jclouse@frb.gov cell: 703-304-6276 blackberry: 202-390-3521

----- Forwarded by James A Clouse/BOARD/FRS on 09/13/2008 11:22 AM -----

Calendar Entry

Meeting

Subject Update on AIG Solvency / 1-888-808-6929 / Access Code: 9494579# / Participation Code: 6133#

Chair Carol Grunwald/NY/FRS

When

Where Location Starts Sat 09/13/2008 02:00 PM 1 hour Ends Sat 09/13/2008 03:00 PM Rooms M9 MKT Central Meeting Room 1/NY Main Building@FRS

Reserved The following have been requested

Invitees Invited The following invitees have been invited Required Adam Ashcraft/NY/FRS@FRS, Alejandro (to) LaTorre/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Christopher Calabia/NY/FRS@FRS, Deborah P Bailey/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, Jamie McAndrews/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Michael Schetzel/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Scott

Meeting Password

Categorize

BOG-- FOIA 10-251 --000079

Alvarez/BOARD/FRS@BOARD, Tobias Adrian/NY/FRS@FRS, William Dudley/NY/FRS@FRS

Description

Your Notes

BOG-- FOIA 10-251 --000080

Not Responsive

▼ Coryann Stefansson/BOARD/FRS@BOARD
Coryann Stefansson/BOARD/FRS@BOARD

To

09/13/2008 11:17 AM

Suzanna Costello/ATL/FRS@FRS, James Barnes/RICH/FRS@FRS, Steven M Durfey/BSR/CHI/FRS@FRS, Ron.Feldman@mpls.frb.org, Nadine.M.Wallman@clev.frb.org, Suzanne Killian/BOARD/FRS@BOARD, Phyllis L Harwell/BOARD/FRS@BOARD, William Charwat/BOARD/FRS, Chris Haley/BOS/FRS@FRS, Kim Jensik/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS, Jerrold L Newlon/CLEV - BSR12/CLEV/FRS@FRS Lehman, Wamu and AIG Restricted

cc Subject

Hi All
Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000081

AIG is an emerging issue and I will update you as events arise but I get a sense if things get bad this issue could devolve quickly. Here too you need to get a sense of exposure/risk to AIG.
Not Responsive

I am in the office if you need me Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555

BOG-- FOIA 10-251 --000082

From: To: Subject: Date:

Donald L Kohn

(b) (6)
Re: AIG 09/13/2008 11:36 AM

(b) (5)

(b) (6) (b) (6)
To cc 09/13/2008 11:14 AM Subject Donald L Kohn/BOARD/FRS@BOARD Kevin Warsh/BOARD/FRS@BOARD, Timothy Geithner/NY/FRS@FRS Re: AIG

Duplicate

BOG-- FOIA 10-251 --000083

From: To: Subject: Date:

(b) (6)
Donald L Kohn Re: AIG 09/13/2008 11:38 AM

Thanks. ▼ Donald L Kohn/BOARD/FRS
Donald L Kohn/BOARD/FRS

To cc Subject

(b) (6)

09/13/2008 11:36 AM

Re: AIG

Duplicate

BOG-- FOIA 10-251 --000084

From: To: Subject: Date:

Michael.S.Gibson@frb.gov Christopher.Calabia@ny.frb.org; Tobias.Adrian@ny.frb.org; Adam.Ashcraft@ny.frb.org aig 09/13/2008 11:51 AM

Chris et al, Can one of you guys give me a call so we can coordinate the work on AIG and hopefully reduce overlap? Thanks, Mike 202-452-2495

BOG-- FOIA 10-251 --000085

From: To: Subject: Date: Attachments:

William B English Michael S Gibson memo 09/13/2008 12:25 PM AIG memo.doc

Here is what I have. Derivatives are on p. 3. Comments on anything are very welcome. Thanks, Bill E.

BOG-- FOIA 10-251 --000086

(b) (5)

BOG-- FOIA 10-251 --000087

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000088

(b) (5)

BOG-- FOIA 10-251 --000089

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000090

From: To: Cc: Subject: Date:

Tobias Adrian Michael S Gibson Adam Ashcraft; Christopher Calabia; Michael S Gibson Re: aig 09/13/2008 12:26 PM

Hello Mike, here is what we are working on: 1) Chris Calabia: assesment of liquidity / solvency of AIG and subs 2) Adam Ashcraft / Warren Hrung: assesment of collateral valuation, both fundamental and market based 3) Tobias Adrian: systemic risk asessment Let me know if you want further info. I am on the 9th floor with the markets group, you can reach me on blackberry at
(b) (6)

------------------------------------------------------------------Tobias Adrian Federal Reserve Bank of New York Capital Markets Research Tel: (212) 720-1717 http://nyfedeconomists.org/adrian/ -----------------------------------------------------------------The views in this message are those of the sender and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. ▼ Michael S Gibson/Board/FRS@BOARD
Michael S Gibson/Board/FRS@BOARD Sent by: Michael S Gibson/BOARD/FRS@BOARD

To

Christopher Calabia/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS aig

cc Subject 09/13/2008 11:54 AM

Duplicate

BOG-- FOIA 10-251 --000091

From: To: Cc: Subject: Date:

Adam Ashcraft Alejandro LaTorre; Warren Hrung Tobias Adrian; Michael S Gibson AIG solvency 09/13/2008 12:27 PM

(b) (5)

ABA Adam B. Ashcraft Financial Intermediation Function Federal Reserve Bank of New York
BOG-- FOIA 10-251 --000092

(212) 720-1617 phone (212) 720-8363 fax
(b) (6)

----------------------------------------------------------------------------------------------------The contents of this e-mail reflect the opinion of the author and not the opinion of the Federal Reserve Bank of New York or the Federal Reserve System.

BOG-- FOIA 10-251 --000093

From: To: Cc: Subject: Date:

Adam Ashcraft Tobias Adrian Christopher Calabia; Michael S Gibson Re: aig 09/13/2008 12:27 PM

Tobais I circled around with Alex and am working on the solvency question. It looks like Markets has the collateral issue in control ABA Adam B. Ashcraft Financial Intermediation Function Federal Reserve Bank of New York (212) 720-1617 phone (212) 720-8363 fax
(b) (6)

----------------------------------------------------------------------------------------------------The contents of this e-mail reflect the opinion of the author and not the opinion of the Federal Reserve Bank of New York or the Federal Reserve System.

BOG-- FOIA 10-251 --000094

From: To: Cc: Subject: Date:

Tobias Adrian Adam Ashcraft Christopher Calabia; Michael S Gibson Re: aig 09/13/2008 12:29 PM

ok ------------------------------------------------------------------Tobias Adrian Federal Reserve Bank of New York Capital Markets Research Tel: (212) 720-1717 http://nyfedeconomists.org/adrian/ -----------------------------------------------------------------The views in this message are those of the sender and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. ▼ Adam Ashcraft/NY/FRS
Adam Ashcraft/NY/FRS

To cc

Tobias Adrian/NY/FRS@FRS Christopher Calabia/NY/FRS@FRS, Michael S Gibson/Board/FRS@BOARD Re: aig

09/13/2008 12:31 PM

Subject

Duplicate

BOG-- FOIA 10-251 --000095

From: To:

Cc: Subject: Date:

Patricia Mosser Alejandro LaTorre; Richard Charlton; Tobias Adrian; jim.mahoney@ny.frb.org; Catherine Voigts; Adam Ashcraft; Michael Schetzel; Terrence Checki; William Rutledge; Brian Peters; christine.cumming@ny.frb.org; Meg McConnell; Warren Hrung; Hayley Boesky; Chris Burke; Richard Dzina; William Walsh Brian F Madigan; Scott Alvarez AIG/Board call 09/13/2008 12:51 PM

Summary of 11 am call between AIG and BOG: Attendees from AIG: CEO, CFO, Vice Chm, JPMC bankers (lead: Doug Bronski) Attendees from Board staff: Brian Madigan, Scott Alvarez FRBNY: Trish Mosser, Rich Charlton
(b) (4) (b) (5) (b) (4)

(b) (4)

(b) (4) (b) (5) (b)(4) & (b)(5)

(b) (5)

(b) (4)

BOG-- FOIA 10-251 --000096

Scott finished the call telling them they should not be particularly optimistic, given the hurtles and history of 13-3 lending.

BOG-- FOIA 10-251 --000097

From: To: Cc: Subject: Date:

Michael.S.Gibson@frb.gov Adam.Ashcraft@ny.frb.org Alejandro.LaTorre@ny.frb.org; Tobias.Adrian@ny.frb.org; Warren.Hrung@ny.frb.org Re: AIG solvency 09/13/2008 12:57 PM

Adam,

(b) (5) (b) (5) (b) (5) (b) (5)
Mike

Adam Ashcraft/NY/FRS@F RS To Alejandro LaTorre/NY/FRS@FRS, 09/13/2008 12:27 Warren Hrung/NY/FRS@FRS PM cc Tobias Adrian/NY/FRS@FRS, Michael S Gibson/BOARD/FRS@BOARD Subject AIG solvency

Duplicate

BOG-- FOIA 10-251 --000098

From: To: Subject: Date: Attachments:

Brandon Hall BSR LFIC LFI Exposures to AIG (9/13/08 AM Update) 09/13/2008 01:00 PM LFI Key Credit Exposures to AIG 091308.xls

RESTRICTED FR --Below and attached please find the most current version of LFI credit exposures to AIG. This data represents the best information available, culled from the sources at hand (i.e. not reaching out directly to the firms). Using flow-basis traffic, we will work to update this information over the course of today and going forward.

(b)(4) & (b)(8)

____________________________________ Brandon J. Hall Counterparty Credit Risk Monitoring & Analysis Federal Reserve Bank of New York 33 Liberty St. | New York, NY 10045 P: 212-720-1349 F: 212-720-1468 E: brandon.hall@ny.frb.org

BOG-- FOIA 10-251 --000099

BOG-- FOIA 10-251 --000100

From: To: Subject: Date: Attachments:

Jon D Greenlee Michael S Gibson; Christopher Calabia Rough cut at a liquidity section 09/13/2008 01:01 PM AIG Funding and Liquidity Needs.doc

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

BOG-- FOIA 10-251 --000101

(b) (5)

BOG-- FOIA 10-251 --000102

From: To: Cc: Subject: Date:

Warren Hrung Adam Ashcraft Alejandro LaTorre; Michael S Gibson; Tobias Adrian Re: AIG solvency 09/13/2008 01:01 PM

Very quick and dirty.

(b) (5)

Warren B. Hrung Analytical Development Markets Group Federal Reserve Bank of New York (212) 720 - 6054 ▼ Adam Ashcraft/NY/FRS
Adam Ashcraft/NY/FRS

To cc Subject

Alejandro LaTorre/NY/FRS@FRS, Warren Hrung/NY/FRS@FRS Tobias Adrian/NY/FRS@FRS, Michael S Gibson/BOARD/FRS@BOARD AIG solvency

09/13/2008 12:30 PM

Duplicate

BOG-- FOIA 10-251 --000103

From: To: Cc: Subject: Date:

Adam Ashcraft Michael S Gibson Alejandro LaTorre; Tobias Adrian; Warren Hrung Re: AIG solvency 09/13/2008 01:03 PM

Mike
(b) (5)

Sent from my BlackBerry Wireless Handheld ▼ Michael S Gibson ----- Original Message ----From: Michael S Gibson Sent: 09/13/2008 12:57 PM EDT To: Adam Ashcraft Cc: Alejandro LaTorre; Tobias Adrian; Warren Hrung Subject: Re: AIG solvency

Adam,

Duplicate

▼ Adam Ashcraft/NY/FRS@FRS
Adam Ashcraft/NY/FRS@FRS

To cc Subject

Alejandro LaTorre/NY/FRS@FRS, Warren Hrung/NY/FRS@FRS Tobias Adrian/NY/FRS@FRS, Michael S Gibson/BOARD/FRS@BOARD AIG solvency

09/13/2008 12:27 PM

Duplicate

BOG-- FOIA 10-251 --000104

From: To: Subject: Date: Attachments:

Coryann Stefansson Pat Soriano; William Charwat; Catherine A Tilford; Laura A Macedo; Gregory H Feldberg; Cheryl Taylor; Nancy R Berlad; Kwayne Jennings; Nancy J Oakes; Tim P Clark; David Gibson; Matthew L Canzater; Christine E Schwaninger; Genevievette E Walker Fw: LFI Exposures to AIG (9/13/08 AM Update) 09/13/2008 01:07 PM LFI Key Credit Exposures to AIG 091308.xls

Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555
----- Forwarded by Coryann Stefansson/BOARD/FRS on 09/13/2008 01:06 PM ----Brandon Hall/NY/FRS@FRS To 09/13/2008 01:00 PM cc Subject LFI Exposures to AIG (9/13/08 AM Update) BSR LFIC

Duplicate

BOG-- FOIA 10-251 --000105

From: To: Cc: Subject: Date:

Brian F Madigan James A Clouse; William B English; William R Nelson; Roberto Perli; Michael S Gibson; Deborah P Bailey; Jon D Greenlee Brian F Madigan Fw: AIG/Board call 09/13/2008 01:10 PM

----- Forwarded by Brian F Madigan/BOARD/FRS on 09/13/2008 01:08 PM ----Patricia Mosser/NY/FRS@FRS

To

09/13/2008 12:51 PM

Alejandro LaTorre/NY/FRS@FRS@NY, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, jim.mahoney@ny.frb.org, Catherine Voigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS, Michael Schetzel/NY/FRS, Terrence Checki/NY/FRS, William Rutledge/NY/FRS@FRS@NY, Brian Peters/NY/FRS, christine.cumming@ny.frb.org, Meg McConnell/NY/FRS@FRS, Warren Hrung/NY/FRS, Hayley Boesky/NY/FRS, Chris Burke/NY/FRS, Richard Dzina/NY/FRS, William Walsh/NY/FRS Brian F Madigan/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD AIG/Board call

cc Subject

Duplicate

BOG-- FOIA 10-251 --000106

Meeting Update Request:
Calendar Entry Subject: When Date: Time: Chair: Invitees Required (to): Update on AIG Solvency / 1-888-808-6929 / Access Code: 9494579# / Participation Code: 6133# Saturday 09/13/2008 02:00 PM - 03:00 PM (1 hour) Carol Grunwald Adam Ashcraft/NY/FRS@FRS; Alejandro LaTorre/NY/FRS@FRS; Brian F Madigan/BOARD/FRS@BOARD; Catherine Voigts/NY/FRS@FRS; Christopher Calabia/NY/FRS@FRS; Deborah P Bailey/BOARD/FRS@BOARD; Hayley Boesky/NY/FRS@FRS; James A Clouse/BOARD/FRS@BOARD; Jamie McAndrews/NY/FRS@FRS; Jim Mahoney/NY/FRS@FRS; Jon D Greenlee/BOARD/FRS@BOARD; Michael S Gibson/BOARD/FRS@BOARD; Michael Schetzel/NY/FRS@FRS; Patricia Mosser/NY/FRS@FRS; Scott Alvarez/BOARD/FRS@BOARD; Susan Stiehm/NY/FRS@FRS; Terrence Checki/NY/FRS@FRS; Tobias Adrian/NY/FRS@FRS; William Dudley/NY/FRS@FRS

Optional (cc): Where Location:

Operations Room

Room changed to the Operations Room, 9th floor.

BOG-- FOIA 10-251 --000107

From: To: Subject: Date: Attachments:

Michael S Gibson Jon D Greenlee; William B English; William R Nelson; Christopher Calabia; Adam Ashcraft; Alejandro LaTorre; Roberto Perli; James A Clouse derivatives 09/13/2008 01:57 PM aig-derivatives.doc

I've written up a page on derivatives with the limited information I have. If anyone can fill in any details, please do so. Mike

BOG-- FOIA 10-251 --000108

(b) (5)

BOG-- FOIA 10-251 --000109

(b) (5)

BOG-- FOIA 10-251 --000110

From: To: Cc: Subject: Date:

Tobias Adrian Michael S Gibson; Adam Ashcraft Alejandro LaTorre; Warren Hrung Re: AIG solvency 09/13/2008 02:04 PM

Mike, I have put together a note on spillover risk, i will send it to you after the call. Tobias ▼ Michael S Gibson ----- Original Message ----From: Michael S Gibson Sent: 09/13/2008 12:57 PM EDT To: Adam Ashcraft Cc: Alejandro LaTorre; Tobias Adrian; Warren Hrung Subject: Re: AIG solvency Duplicate

BOG-- FOIA 10-251 --000111

From: To: Subject: Date:

Scott Alvarez Donald Kohn Fw: Material - As per Alex LaTorre 09/13/2008 02:09 PM

Don The cell number has been the most effective way to reach Jacob Scott -------------------------Sent from my BlackBerry Wireless Handheld ▼ Alejandro LaTorre ----- Original Message ----From: Alejandro LaTorre Sent: 09/13/2008 08:07 AM EDT To: Scott Alvarez Cc: Brian Peters; Dianne Dobbeck; Millie Martinez Subject: Re: Material - As per Alex LaTorre

Scott;

I have Jacob's information email: jacob.frankel@aig.com Tel: 212-770-8860 (b) (6) Cell: Regards, Alex
Duplicate

BOG-- FOIA 10-251 --000112

From: To: Subject: Date:

Coryann Stefansson Gregory H Feldberg Re: MONDAY IMPORTANT.... 09/13/2008 02:34 PM

Yep...its pretty bad Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # 202 294 9829 ▼ Gregory H Feldberg ----- Original Message ----From: Gregory H Feldberg Sent: 09/13/2008 01:41 PM EDT To: Coryann Stefansson Subject: Re: MONDAY IMPORTANT....

Wow... so I should get out of ExMan after all? Greg Feldberg Office: (202) 452-2598 Cellphone: (202) 390-0201 ▼ Coryann Stefansson ----- Original Message ----From: Coryann Stefansson Sent: 09/13/2008 01:13 PM EDT To: Pat Soriano; William Charwat; Catherine Tilford; Laura Macedo; Gregory Feldberg; Cheryl Taylor; Nancy Berlad; Kwayne Jennings; Nancy Oakes; Tim Clark; David Gibson; Matthew Canzater; Christine Schwaninger; Genevievette Walker Subject: MONDAY IMPORTANT....

Hey ALL

I need everyone in the office on Monday morning ...Sorry to do this to you but unless you are out of state I need you here. There are significant issues at Lehman and Aig....I will arrange a call with you on Sunday nite at 7 pm.......I will send an email appt for Sunday nite....We need to be monitoring and analyzing our firms etc and implications from market events..... I am sending an appt to you shortly ..... Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555
BOG-- FOIA 10-251 --000113

From: To: Subject: Date:

Coryann Stefansson James Barnes Re: Lehman, Wamu and AIG Restricted 09/13/2008 02:35 PM

Sorry.....need to get an understanding of lehman bros exposures at the firm and aig......without going to the firm.....anychance u all have reports lying around Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # 202 294 9829 ▼ James Barnes ----- Original Message ----From: James Barnes Sent: 09/13/2008 01:44 PM EDT To: Coryann Stefansson Subject: Re: Lehman, Wamu and AIG Restricted

Cory I am unable to open this message on my blackberry because of the encryption. Can this wait until Monday or should I drive into the office to read. Jim -------------------------Sent from my BlackBerry Wireless Handheld ▼ Coryann Stefansson ----- Original Message ----From: Coryann Stefansson Sent: 09/13/2008 11:14 AM EDT To: Suzanna Costello; James Barnes; Steven Durfey; Ron Feldman; Nadine Wallman; Suzanne Killian; Phyllis Harwell; William Charwat; Chris Haley; Kim Jensik; Jon Greenlee; Jerrold Newlon Subject: Lehman, Wamu and AIG Restricted

[This message was encrypted by the sender]

BOG-- FOIA 10-251 --000114

From: To: Subject: Date:

Jon D Greenlee James Embersit Re: Urgent conference call 09/13/2008 02:48 PM

Not Responsive Don't worry, we can talked in the morning. we've been dealing with a likely liquidity crisis at AIG Not Responsive early next week. (b) (5)

.

Just wanted to talk about steps on Monday and to get everyone prepared. Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ James Embersit/BOARD/FRS
James Embersit/BOARD/FRS

To cc Subject

Jon D Greenlee/BOARD/FRS@BOARD

09/13/2008 02:45 PM

Re: Urgent conference call

Turns out I can't get to a land line. Pay phones are obsolete. Will keep looking but may have to do cell for me. Jim Embersit office - 202-452-5249 cell-202-528-7884 -Jim Embersit 202-452-5249 ------------------------Sent from my BlackBerry Wireless Handheld ▼ Jon D Greenlee ----- Original Message ----From: Jon D Greenlee Sent: 09/13/2008 01:58 PM EDT To: Sabeth Siddique; James Embersit Subject: Re: Urgent conference call

I'd rather not do this on cell phones - is there landline where I can reach you?

BOG-- FOIA 10-251 --000115

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Sabeth I Siddique/BOARD/FRS
Sabeth I Siddique/BOARD/FRS

To cc Subject

Jon D Greenlee/BOARD/FRS@BOARD

09/13/2008 01:51 PM

Re: Urgent conference call

(b) (5)

-------------------------Sent from my BlackBerry Wireless Handheld ▼ Jon D Greenlee ----- Original Message ----From: Jon D Greenlee Sent: 09/13/2008 01:38 PM EDT To: James Embersit; Sabeth Siddique; Adrienne Haden; Nina Nichols Subject: Urgent conference call

We need to talk about the developments in the marketplace and possible next steps. I suggest we have a call tomorrow morning at 10 AM, but if tonight is better, let me know. The always on conference call line is (202) 452-3568 pass code 123456 Thanks Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

BOG-- FOIA 10-251 --000116

From: To: Cc: Subject: Date:

Donald L Kohn Scott.Alvarez@frb.gov brian.f.madigan@frb.gov Re: Fw: Material - As per Alex LaTorre 09/13/2008 02:52 PM

update: brief conversation with Jacob. Tol dhim we were "very reluctant" to open up another 13-3 facility for an entity not even an investment bank. And that the market thought it was not only a liquidity problem but also a capital problem. He gave me the bridge to asset sales speech and then said he would get willumsted and call me back. I'm waiting.

BOG-- FOIA 10-251 --000117

From: To: Subject: Date:

James Embersit Jon D Greenlee Re: Urgent conference call 09/13/2008 02:54 PM

Great Will be fully prepared for tomorrows call Jim Embersit office - 202-452-5249 cell-202-528-7884 -Jim Embersit 202-452-5249 ------------------------Sent from my BlackBerry Wireless Handheld ▼ Jon D Greenlee ----- Original Message ----From: Jon D Greenlee Sent: 09/13/2008 02:48 PM EDT To: James Embersit Subject: Re: Urgent conference call Duplicate

BOG-- FOIA 10-251 --000118

From: To: Subject: Date:

Jon D Greenlee Christopher Calabia; William R Nelson; William B English; James A Clouse; Alejandro LaTorre; Brian F Madigan; Deborah P Bailey AIG's Ins Companies 09/13/2008 03:04 PM

Reading the AM Best stuff more closely, all the insurance subs were downgraded in June 2008 and the outlook was flagged as "negative". Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

BOG-- FOIA 10-251 --000119

From: To: Subject: Date:

Roger Cole Deborah P Bailey Re: AIG/Board call 09/13/2008 03:05 PM

Not good! -------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000120

From: To: Subject: Date:

Donald L Kohn Randall S Kroszner several items 09/13/2008 03:19 PM

1. Talked briefly to AIG, and awaiting a call back,

(b)(4) & (b)(5)

2. According to Ben, 3.
(b) (5)

(b) (5)

Don

BOG-- FOIA 10-251 --000121

From: To: Subject: Date:

Jon D Greenlee William B English Re: AIG's Ins Companies 09/13/2008 03:31 PM

AM Best rates their claims paying ability. They went from A++G (the highest rating) to A+G with a negative outlook. I'm going to drop the stuff off on my way out. Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc Subject

Jon D Greenlee/BOARD/FRS@BOARD

09/13/2008 03:26 PM

Re: AIG's Ins Companies

Downgraded to what and why? Moody's downgraded a bunch of AIG subs because they had guarantees from the holding company and the holding company got downgraded. --Bill E. ▼ Jon D Greenlee/BOARD/FRS
Duplicate

BOG-- FOIA 10-251 --000122

Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

BOG-- FOIA 10-251 --000123

Meeting Invitation:
Calendar Entry Subject: When Date: Time: Chair: Invitees Required (to): AIG Update Saturday 09/13/2008 04:00 PM - 05:00 PM (1 hour) Kristin Mayer Adam Ashcraft/NY/FRS@FRS; Alejandro LaTorre/NY/FRS@FRS; Arthur Angulo/NY/FRS@FRS; Beverly Hirtle/NY/FRS@FRS; Brian Peters/NY/FRS@FRS; Calvin Mitchell/NY/FRS@FRS; Catherine Voigts/NY/FRS@FRS; Chris Burke/NY/FRS@FRS; Chris McCurdy/NY/FRS@FRS; Hayley Boesky/NY/FRS@FRS; Helen Mucciolo/NY/FRS@FRS; Jamie McAndrews/NY/FRS@FRS; Jeanmarie Davis/NY/FRS@FRS; Jim Mahoney/NY/FRS@FRS; Joyce Hansen/NY/FRS@FRS; Lawrence Radecki/NY/FRS@FRS; Lucinda M Brickler/NY/FRS@FRS; Meg McConnell/NY/FRS@FRS; Michael Schetzel/NY/FRS@FRS; Patricia Mosser/NY/FRS@FRS; Patrick M Parkinson/BOARD/FRS@BOARD; Richard Charlton/NY/FRS@FRS; Richard Dzina/NY/FRS@FRS; Sandy Krieger/NY/FRS@FRS; Sarah Bell/NY/FRS@FRS; Sarah Dahlgren/NY/FRS@FRS; Simon Potter/NY/FRS@FRS; Steven J Manzari/NY/FRS@FRS; Terrence Checki/NY/FRS@FRS; Theodore Lubke/NY/FRS@FRS; Thomas Baxter/NY/FRS@FRS; Til Schuermann/NY/FRS@FRS; Timothy Geithner/NY/FRS@FRS; Tobias Adrian/NY/FRS@FRS; Warren Hrung/NY/FRS@FRS; Wendy Ng/NY/FRS@FRS; William BRODOWS/NY/FRS@FRS; William Dudley/NY/FRS@FRS; William Rutledge/NY/FRS@FRS; William Walsh/NY/FRS@FRS Alexandra Merle-Huet/NY/FRS@FRS; Bettyann Griffith/NY/FRS@FRS; Daniel Boulos/NY/FRS@FRS; Marlene Williams/NY/FRS@FRS; Michael Held/NY/FRS@FRS; Michael Silva/NY/FRS@FRS; Tanshel Pointer/NY/FRS@FRS Board Room

Optional (cc): Where Location:

If your schedule allows, please feel free to attend this meeting.

BOG-- FOIA 10-251 --000124

From: To: Subject: Date:

Donald L Kohn Kevin Warsh AIG 09/13/2008 03:42 PM

please call re my call with Frenkel and Willumsted

BOG-- FOIA 10-251 --000125

Meeting Update Request:
Calendar Entry Subject: When Date: Time: Chair: Invitees Required (to): AIG Update Saturday 09/13/2008 04:00 PM - 05:00 PM (1 hour) Kristin Mayer Adam Ashcraft/NY/FRS@FRS; Alejandro LaTorre/NY/FRS@FRS; Arthur Angulo/NY/FRS@FRS; Beverly Hirtle/NY/FRS@FRS; Brian Peters/NY/FRS@FRS; Calvin Mitchell/NY/FRS@FRS; Catherine Voigts/NY/FRS@FRS; Chris Burke/NY/FRS@FRS; Chris McCurdy/NY/FRS@FRS; Hayley Boesky/NY/FRS@FRS; Helen Mucciolo/NY/FRS@FRS; Jamie McAndrews/NY/FRS@FRS; Jeanmarie Davis/NY/FRS@FRS; Jim Mahoney/NY/FRS@FRS; Joyce Hansen/NY/FRS@FRS; Lawrence Radecki/NY/FRS@FRS; Lucinda M Brickler/NY/FRS@FRS; Meg McConnell/NY/FRS@FRS; Michael Schetzel/NY/FRS@FRS; Patricia Mosser/NY/FRS@FRS; Patrick M Parkinson/BOARD/FRS@BOARD; Richard Charlton/NY/FRS@FRS; Richard Dzina/NY/FRS@FRS; Sandy Krieger/NY/FRS@FRS; Sarah Bell/NY/FRS@FRS; Sarah Dahlgren/NY/FRS@FRS; Simon Potter/NY/FRS@FRS; Steven J Manzari/NY/FRS@FRS; Terrence Checki/NY/FRS@FRS; Theodore Lubke/NY/FRS@FRS; Thomas Baxter/NY/FRS@FRS; Til Schuermann/NY/FRS@FRS; Timothy Geithner/NY/FRS@FRS; Tobias Adrian/NY/FRS@FRS; Warren Hrung/NY/FRS@FRS; Wendy Ng/NY/FRS@FRS; William BRODOWS/NY/FRS@FRS; William Dudley/NY/FRS@FRS; William Rutledge/NY/FRS@FRS; William Walsh/NY/FRS@FRS Alexandra Merle-Huet/NY/FRS@FRS; Bettyann Griffith/NY/FRS@FRS; Daniel Boulos/NY/FRS@FRS; Marlene Williams/NY/FRS@FRS; Michael Held/NY/FRS@FRS; Michael Silva/NY/FRS@FRS; Tanshel Pointer/NY/FRS@FRS Board Room

Optional (cc): Where Location:

If your schedule allows, please feel free to attend this meeting. Dial-in Info: Number: 888-557-8511 Access Code: 8785192

BOG-- FOIA 10-251 --000126

From: To: Cc: Subject: Date:

Donald L Kohn Timothy Geithner; Kevin Warsh (b) (6) Scott Alvarez; brian.f.madigan@frb.gov AIG 09/13/2008 03:54 PM

Strange conversation. Willumsted (sp?) and Frenkel didn't seem to be aware of the captial raise/ asset sale plan Kevin told Ben about, and of course I didn't say anything. I told them we were "very reluctant" to open up our discount window to them when it wasn't clear they had a good plan for getting enough capital into the company and were depending on asset sales over along period. I said we also were aware that we would begiving a whole new class or classes of borrowers under our discount window umbrella. They said they had prospects for 10 b of immediate private equity and maybe about 10 b of new liquidity from convincing dinallo to allow them to do some sec lending from the insurance companies to the HC. they needed 20 from us to buy time to sell selected assets, like interests in their insurance companies. I told them to make plans as if we wouldn't be there for them, but also to keep in touch. they seemed to think they had a week or so-(b) (5) though the next few days would be tough.

BOG-- FOIA 10-251 --000127

From: To: Cc: Subject: Date:

(b) (6)
Donald L Kohn brian.f.madigan@frb.gov; Kevin Warsh; Scott Alvarez; Timothy Geithner Re: AIG 09/13/2008 03:57 PM

Maybe they are playing their cards close to the vest. ▼ Donald L Kohn/BOARD/FRS
Donald L Kohn/BOARD/FRS

To

09/13/2008 03:54 PM

Geithner/NY/FRS@FRS, Kevin Warsh/BOARD/FRS@BOARD Scott Alvarez/BOARD/FRS@BOARD, brian.f.madigan@frb.gov AIG

(b) (6)

Timothy

cc Subject

Duplicate

BOG-- FOIA 10-251 --000128

From: To: Cc: Subject: Date: Attachments:

Tobias Adrian Michael S Gibson; Adam Ashcraft; Christopher Calabia Joshua Rosenberg AIG Financial System Risk Evaluation.doc 09/13/2008 04:00 PM AIG Financial System Risk Evaluation.doc

Here is a note on AIG's financial system risk. I will add more explanations later in the day. Tobias ------------------------------------------------------------------Tobias Adrian Federal Reserve Bank of New York Capital Markets Research Tel: (212) 720-1717 http://nyfedeconomists.org/adrian/ -----------------------------------------------------------------The views in this message are those of the sender and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. - AIG Financial System Risk Evaluation.doc

BOG-- FOIA 10-251 --000129

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000130

1

(b) (5)

BOG-- FOIA 10-251 --000131

2

(b) (5)

BOG-- FOIA 10-251 --000132

3

(b) (5)

BOG-- FOIA 10-251 --000133

(b) (5)

BOG-- FOIA 10-251 --000134

From: To: Cc: Subject: Date:

Scott Alvarez Donald L Kohn brian.f.madigan@frb.gov Re: AIG 09/13/2008 04:04 PM

(b) (6)

Kevin Warsh; Timothy Geithner

(b) (5)

Scott ▼ Donald L Kohn/BOARD/FRS
Donald L Kohn/BOARD/FRS

To

09/13/2008 03:54 PM

Geithner/NY/FRS@FRS, Kevin Warsh/BOARD/FRS@BOARD Scott Alvarez/BOARD/FRS@BOARD, brian.f.madigan@frb.gov AIG

(b) (6)

Timothy

cc Subject

Duplicate

BOG-- FOIA 10-251 --000135

From: To: Subject: Date:

William R Nelson Roberto Perli consequences 09/13/2008 04:27 PM

(b) (5)

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000136

From: To: Subject: Date:

William R Nelson William B English; James A Clouse what is this, a joke? 09/13/2008 04:29 PM

(b) (5)

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000137

From: To: Cc: Subject: Date:

James A Clouse William R Nelson William B English Re: what is this, a joke? 09/13/2008 04:34 PM

Only for someone with a very dark sense of humor! jclouse@frb.gov cell: 703-304-6276 blackberry: 202-390-3521 ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

William B English/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD what is this, a joke?

09/13/2008 04:29 PM

Duplicate

BOG-- FOIA 10-251 --000138

From: To: Subject: Date:

William R Nelson Brian F Madigan a key question 09/13/2008 05:08 PM

(b) (5)

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000139

From: To: Subject: Date: Attachments:

William B English Brian F Madigan; James A Clouse; William R Nelson; Roberto Perli; Antoinette Gibson; Jon D Greenlee; William B English Partial memo draft 09/13/2008 05:27 PM AIG memo v2.doc Binder1.pdf

Attached is a rough draft of the first part of our memo. I was not sure where to stop, so I put in some discussion of the current problems (which may overlap with Jon's discussion of liquidity in the second section) and of the possible spillovers (which may overlap with the Nelson/Clouse discussion of the pros and cons of lending).
(b) (5)

Comments very welcome, Bill E.

BOG-- FOIA 10-251 --000140

(b) (5)

BOG-- FOIA 10-251 --000141

(b) (5)

BOG-- FOIA 10-251 --000142

(b) (5)

BOG-- FOIA 10-251 --000143

(b) (5)

BOG-- FOIA 10-251 --000144

(b) (5)

BOG-- FOIA 10-251 --000145

(b) (5)

BOG-- FOIA 10-251 --000146

American International Group, Inc. and Subsidiaries

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEET

(in millions) (unaudited)

June 30, 2008 Assets: Investments and Financial Services assets: Fixed maturity securities: Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 – $393,170) Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) Bond trading securities, at fair value Equity securities: Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) Common and preferred stocks trading, at fair value Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) Mortgage and other loans receivable, net of allowance (2008 – $99; 2007 – $77) (held for sale: 2008 – $30; 2007 – $377 (amount measured at fair value: 2008 – $745) Financial Services assets: Flight equipment primarily under operating leases, net of accumulated depreciation (2008 – $11,359; 2007 – $10,499) Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) Trading securities, at fair value Spot commodities, at fair value Unrealized gain on swaps, options and forward transactions, at fair value Trade receivables Securities purchased under agreements to resell, at fair value in 2008 Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale: 2008 – $36; 2007 – $233) Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) Short-term investments (amount measured at fair value: 2008 – $24,167) Total Investments and Financial Services assets Cash Investment income due and accrued Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) Current and deferred income taxes Deferred policy acquisition costs Investments in partially owned companies Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 – $5,446) Separate and variable accounts, at fair value Goodwill Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) Total assets
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$ 393,316 21,632 8,801 17,306 22,514 2,496 34,384

$ 397,372 21,581 9,982 17,900 21,376 2,370 33,727

43,887 1,205 35,170 90 11,548 2,294 16,597 33,311 59,530 62,029 69,492 835,602 2,229 6,614 20,050 22,940 8,211 46,733 628 5,692 73,401 10,661 17,115 $1,049,876

41,984 40,305 4,197 238 12,318 672 20,950 31,234 75,662 58,823 51,351 842,042 2,284 6,587 18,395 23,103 — 43,914 654 5,518 78,684 9,414 17,766 $1,048,361

1

BOG-- FOIA 10-251 --000147

American International Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET
(in millions, except share data) (unaudited)

(continued)

June 30, 2008 Liabilities: Reserve for losses and loss expenses Unearned premiums Future policy benefits for life and accident and health insurance contracts Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) Other policyholders’ funds Commissions, expenses and taxes payable Insurance balances payable Funds held by companies under reinsurance treaties Current income taxes payable Financial Services liabilities: Securities sold under agreements to repurchase (amount measured at fair value: 2008 – $8,338) Trade payables Securities and spot commodities sold but not yet purchased, at fair value Unrealized loss on swaps, options and forward transactions, at fair value Trust deposits and deposits due to banks and other depositors (amount measured at fair value: 2008 – $240) Commercial paper and extendible commercial notes Long-term borrowings (amount measured at fair value: 2008 – $53,839) Separate and variable accounts Securities lending payable Minority interest Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) Total liabilities Preferred shareholders’ equity in subsidiary companies Commitments, Contingencies and Guarantees (See Note 6) Shareholders’ equity: Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2008 – 2,948,038,001; 2007 – 2,751,327,476 Additional paid-in capital Payments advanced to purchase shares Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock Total shareholders’ equity Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$

88,747 28,738 147,232 265,411 13,773 5,597 5,569 2,498 —

$

85,500 27,703 136,387 258,459 12,599 6,310 4,878 2,501 3,823

9,659 1,622 3,189 24,232 6,165 15,061 163,577 73,401 75,056 11,149 31,012 971,688 100

8,331 6,445 4,709 14,817 4,903 13,114 162,935 78,684 81,965 10,422 27,975 952,460 100

7,370 9,446 — 73,743 (3,903) (8,568) 78,088 $1,049,876

6,878 2,848 (912) 89,029 4,643 (6,685) 95,801 $1,048,361

2

BOG-- FOIA 10-251 --000148

American International Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in millions, except per share data) (unaudited)

Three Months Ended June 30, 2008 2007 Revenues: Premiums and other considerations Net investment income Net realized capital losses Unrealized market valuation losses on AIGFP super senior credit default swap portfolio Other income Total revenues Benefits and expenses: Incurred policy losses and benefits Insurance acquisition and other operating expenses Total benefits and expenses Income (loss) before income taxes (benefits) and minority interest Income taxes (benefits) Income (loss) before minority interest Minority interest Net income (loss) Earnings (loss) per common share: Basic Diluted Dividends declared per common share Average shares outstanding: Basic Diluted
See Accompanying Notes to Consolidated Financial Statements.

Six Months Ended June 30, 2008 2007 $ 42,407 11,682 (12,170) (14,672) 6,717 33,964 34,332 19,652 53,984 (20,020) (6,894) (13,126) (36) $(13,162) $ $ (5.11) (5.11) $39,175 14,977 (98) — 7,741 61,795 32,367 16,928 49,295 12,500 3,405 9,095 (688) $ 8,407 $ $ 3.22 3.21

$21,735 6,728 (6,081) (5,565) 3,116 19,933 18,450 10,239 28,689 (8,756) (3,357) (5,399) 42 $ (5,357) $ (2.06) $ (2.06) $ 0.220 2,605 2,605

$19,533 7,853 (28) — 3,792 31,150 16,221 8,601 24,822 6,328 1,679 4,649 (372) $ 4,277 $ $ 1.64 1.64

$ 0.200 2,602 2,613

$ 0.420 2,575 2,575

$ 0.365 2,607 2,621

3

BOG-- FOIA 10-251 --000149

American International Group, Inc. and Subsidiaries

Segment Results
The following table summarizes the operations of each principal segment: (See also Note 2 to Consolidated Financial Statements.)
Operating Segments
(in millions)

Three Months Ended June 30, 2008 2007 $ 12,757 10,161 (3,605) 797 208 (385) $ 19,933 827 (2,401) (5,905) (314) (715) (248) $ (8,756) $ $12,928 14,023 2,123 1,781 263 32 $31,150 $ 2,976 2,620 47 927 (460) 218 $ 6,328

Percentage Increase/ (Decrease)

Six Months Ended June 30, 2008 2007 $25,831 27,705 4,324 3,450 394 91 $61,795 $ 6,072 4,901 339 1,685 (930) 433 $12,500

Percentage Increase/ (Decrease) (3)% (32) — (81) (80) — (45)% (64)% — — — — — —%

Total revenues(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total Operating income (loss)(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total

(1)% $ 25,046 (28) 18,913 — (10,165) (55) 648 (21) 80 — (558) (36)% $ 33,964 (72)% $ 2,164 — (4,232) — (14,677) — (1,565) — (1,483) — (227) — $(20,020)

(a) Includes other-than-temporary impairment charges of $6.8 billion and $417 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $12.4 billion and $884 million for the six-month periods ended June 30, 2008 and 2007, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS No. 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ (FAS 133), including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $272 million and $(430) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(476) million and $(882) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (b) Includes other-than-temporary impairment charges of $5.2 billion and $324 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $9.6 billion and $716 million for the six-month periods ended June 30, 2008 and 2007, respectively. (c) Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $5 million and $(443) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(199) million and $(603) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (d) For the three- and six-month periods ended June 30, 2008, both revenues and operating income (loss) include unrealized market valuation losses of BOG-- FOIA 10-251 --000150 $5.6 billion and $14.7 billion, respectively, on AIGFP’s super senior credit default swap portfolio. (e) Includes net realized capital losses of $464 million and $1.9 billion for the three- and six-month periods ended June 30, 2008, respectively, including otherthan-temporary impairment charges of $882 million and $1.9 billion, respectively.

From: To:

Subject: Date: Attachments:

Warren Hrung Adam Ashcraft; Alejandro LaTorre; Arthur Angulo; Beverly Hirtle; Brian Peters; Calvin Mitchell; Catherine Voigts; Chris Burke; Chris McCurdy; Hayley Boesky; Helen Mucciolo; Jamie McAndrews; Jeanmarie Davis; Jim Mahoney; Joyce Hansen; Lawrence Radecki; Lucinda M Brickler; Meg McConnell; Michael Schetzel; Patricia Mosser; Patrick M Parkinson; Richard Charlton; Richard Dzina; Sandy Krieger; Sarah Bell; Sarah Dahlgren; Simon Potter; Steven J Manzari; Terrence Checki; Theodore Lubke; Thomas Baxter; Til Schuermann; Timothy Geithner; Tobias Adrian; Warren Hrung; Wendy Ng; William BRODOWS; William Dudley; William Rutledge; William Walsh Merrill report on AIG 09/13/2008 05:35 PM ML-S&P on AIG.pdf

This gives some insight into what S&P is thinking. S&P has a more optimistic view than AIG on credit losses. This is about the fact that things aren't turning around fast enough, leaving bond holders to risk.

Warren B. Hrung Analytical Development Markets Group Federal Reserve Bank of New York (212) 720 - 6054

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(b) (4)

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From: To: Cc: Subject: Date:

Warren Hrung Michael S Gibson Adam Ashcraft AIG CDS exposure 09/13/2008 05:45 PM

Mike, Just to check my numbers, from the file below,

(b) (5)

Warren Warren B. Hrung Analytical Development Markets Group Federal Reserve Bank of New York (212) 720 - 6054

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From: To: Subject: Date:

Jon D Greenlee Michael S Gibson Re: Rough cut at a liquidity section 09/13/2008 05:58 PM

Haven't seen anything. I went home around 4. I'm not sure exactly what they are doing, but I faxed a bunch of insurance info from AM Best. Jon -------------------------Sent from my BlackBerry Wireless Handheld ▼ Michael S Gibson ----- Original Message ----From: Michael S Gibson Sent: 09/13/2008 05:27 PM EDT To: Jon Greenlee Subject: Re: Rough cut at a liquidity section

Jon,

I was offline for a couple hours - anything new on the solvency analysis from NY since the 2pm call? Mike ▼ Jon D Greenlee ----- Original Message ----From: Jon D Greenlee Sent: 09/13/2008 01:01 PM EDT To: Michael Gibson; Christopher Calabia Subject: Rough cut at a liquidity section

[attachment "AIG Funding and Liquidity Needs.doc" deleted by Michael S Gibson/BOARD/FRS] Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

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F om To Cc Subject Da e

M chael S Gibson@f b gov f Adam Ashc aft@ny f b o g Re AIG CDS exposu e 09/13/2008 06 15 M

(b) (5)
Mike

Warren Hrung N FRS@FRS o cc Sub ect Michael S Gibson Boa d RS@BOARD 09 3 2008 05 45 M Adam Ashc a t N RS@ RS AIG CDS exposu e Link

Mike, Just to check my numbers

(b) (5)

Warren Warren B. Hrung Analytical Deve opment Markets Group Federal Reserve Bank of New York (212) 720 - 605

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From: To: Subject: Date: Attachments:

Michael S Gibson William B English Fw: AIG Financial System Risk Evaluation.doc 09/13/2008 06:17 PM AIG Financial System Risk Evaluation.doc

Bill, I believe you asked about this on the 2pm call. Mike
----- Forwarded by Michael S Gibson/BOARD/FRS on 09/13/2008 06:17 PM ----Tobias Adrian/NY/FRS@FRS

To

09/13/2008 04:00 PM

Michael S Gibson/BOARD/FRS@BOARD, Adam Ashcraft/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS Joshua Rosenberg/NY/FRS@FRS AIG Financial System Risk Evaluation.doc

cc Subject

Here is a note on AIG's financial system risk. I will add more explanations later in the day. Tobias ------------------------------------------------------------------Tobias Adrian Federal Reserve Bank of New York Capital Markets Research Tel: (212) 720-1717 http://nyfedeconomists.org/adrian/ -----------------------------------------------------------------The views in this message are those of the sender and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. - AIG Financial System Risk Evaluation.doc
Document is a duplicate

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From: To: Cc: Subject: Date:

Michael S Gibson Patrick M Parkinson Pat White question 09/13/2008 06:25 PM

(b) (5)

MG

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From: To: Cc: Subject: Date:

Patrick M Parkinson William BRODOWS Mike Gibson; Pat White Fw: question 09/13/2008 06:27 PM

Bill, can you help Mike out? Pat ▼ Michael S Gibson ----- Original Message ----From: Michael S Gibson Sent: 09/13/2008 06:25 PM EDT To: Patrick Parkinson Cc: Pat White

Duplicate

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From: To: Cc: Subject: Date:

William BRODOWS Patrick M Parkinson Michael S Gibson; Pat White Re: question 09/13/2008 06:29 PM

I will contact mike after this meeting. ---------------------------------------Sent from my BlackBerry Handheld.

----- Original Message ----From: Patrick.M.Parkinson Sent: 09/13/2008 06:27 PM AST To: William BRODOWS Cc: Michael Gibson; Pat White Subject: Fw: question

Duplicate

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From: To: Subject: Date:

Patricia Mosser Brian F.Madigan; Scott Alvarez; Deborah Bailey; Jon Greenlee; Mike Gibson Fw: AIG update 09/13/2008 07:40 PM

Apologies I meant to include you in the distribution. . Please ignor Richard's replky and go to the message below. Elise will be in touch so we have all the right insurance experts involved in any call with them. ----------------------------Patricia C. Mosser, FRB-NY Sent from my BlackBerry Handheld. ▼ Richard Charlton ----- Original Message ----From: Richard Charlton Sent: 09/13/2008 07:32 PM EDT To: Patricia Mosser; Elise Liebers Subject: Re: AIG update

Pls include me as well--I'll plan to be down here by 9, unless you tell me otherwise, but will need to know where to go and when, and to be let on to the Markets floor, if there isn't someone at the front door. Thanks. ▼ Patricia Mosser/NY/FRS
Patricia Mosser/NY/FRS

To

09/13/2008 07:26 PM

Alejandro LaTorre/NY/FRS@FRS@NY, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, jim.mahoney@ny.frb.org, Catherine Voigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS, Michael Schetzel/NY/FRS, christine.cumming@ny.frb.org, William Dudley/NY/FRS, Terrence Checki/NY/FRS, Elise Liebers/NY/FRS, Meg McConnell/NY/FRS@FRS, William Rutledge/NY/FRS@FRS@NY, Brian Peters/NY/FRS AIG update

cc Subject

2 conversations this afternoon with AIG and NYSID: AIG: Frenkel spoke with Kohn , who urged AIG to continue to pursue private sector solutions and asset sales. Noted continued reluctance to do 13-3 lending. AIG has put together a term sheet for NYSID , which they will be discussing this evening. The term sheet would outline all pieces of liquidity plan, and plans for debt and equity injections , plans for asset sales as well as regulatory forebearance to move assets from subs to parent. AIG asked our views on whether and how to inform Treasury (b) (5) department of their situation.
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(b) (5)

NYSID:

(b)(4), (b)(5), & (b)(8)

Elise, are you and your team available to talk with Dinallo's staff after 9 am tomorrow? Also, could you please coordinate with Board BS&R about their availability?

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From: To: Cc: Subject: Date: Attachments:

William R Nelson William B English Michael S Gibson; Brian F Madigan; James A Clouse; Jon D Greenlee; Roberto Perli; Scott Alvarez; Deborah P Bailey Re: Partial memo draft 09/13/2008 07:43 PM aig ipc draft.doc

(b) (5)

I'm not sure who will be collecting comments and improvements, but I'm happy to. I'm heading home now, but will check my email a bit later. I'll be in tomorrow morning. Bill N.

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To

09/13/2008 05:27 PM

Brian F Madigan/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Antoinette Gibson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Partial memo draft

cc Subject

Duplicate

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From: To: Subject: Date: Attachments:

Michael S Gibson William B English; Michael S Gibson; Brian F Madigan; James A Clouse; Jon D Greenlee; Roberto Perli Re: Partial memo draft 09/13/2008 09:27 PM AIG memo v2.mg.doc

Bill, I added some details, especially on the derivatives stuff. Mike

▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD Partial memo draft

09/13/2008 05:32 PM

Duplicate

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From: To: Cc: Subject: Date: Attachments:

Diane Fraser Jon D Greenlee; Sabeth I Siddique Elise Liebers; Diane.Fraser@frb.gov; Adrienne Haden AIG Org. w/ assets + other info in advance of call w/ NY State Insurance Dept. tomorrow a.m. 09/13/2008 10:28 PM American International Group SNL Corp.Structure Report (9-08).doc

FYI - In general, state insurance statutes allow commercial insurance underwriters to pay out a maximum dividend amount of the greater of (1) the prior year-end net income, or (2) 10% of the surplus as regards policyholders, without the approval of the state’s insurance regulatory authority. State insurance regulatory authorities have the power to approve extraordinary dividends on a case-by-case basis. Attached below is a tiering report showing the corporate structure for American International Group, Inc. (AIG). As you will see, AIG has many subsidiaries.
----- Forwarded by Diane Fraser/BOARD/FRS on 09/13/2008 10:16 PM ----Diane.Fraser@frb.gov To 09/13/2008 09:04 PM cc Subject Jon.D.Greenlee@frb.gov Deborah.P.Bailey@frb.gov, Adrienne.Haden@frb.gov, Elise.Liebers@ny.frb.org, Diane.Fraser@frb.gov Conference call w/ NY State Insurance Dept. re: AIG is being planned for tomorrow a.m. by FRB-NY

Jon, Elise and I have spoken and FRB-NY will keep us informed about the time of the conference call. Diane
Jon.D.Greenlee@frb.gov To "Diane Fraser" <Diane.Fraser@frb.gov> cc "Ms. Deborah P Bailey" <Deborah.P.Bailey@FRB.Gov>, "Adrienne Haden" <Adrienne.Haden@frb.gov> Subject Fw: AIG update

09/13/2008 08:06 PM

Diane, Can you get in touch with Elise and see if what she may need from us or possibly Boston? Thanks
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Jon -------------------------Sent from my BlackBerry Wireless Handheld

Duplicate

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From: To: Subject: Date:

William R Nelson William B English Re: Partial memo draft 09/13/2008 10:39 PM

Ok. No,bi did'pn't Email: william.r.nelson@frb.gov Office: 202-452-3579 Mobile: 202-725-3612 ▼ William B English ----- Original Message ----From: William B English Sent: 09/13/2008 10:37 PM EDT To: William Nelson Subject: Re: Partial memo draft

Bill-

I will be in tomorrow about noon, I think. If you are in before that, you could incorporate Mike's comments, all of which are fine, into your version of the document. If you don't get in before I do, I can do it when I get in. Did you make any changes to my version after the intro and before the part on lending? Let's try to avoid a version control problem if we can! Thanks, Bill E. ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc

William B English/BOARD/FRS@BOARD Michael S Gibson/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD Re: Partial memo draft

09/13/2008 07:43 PM

Subject

Duplicate

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From: To: Subject: Date:

William R Nelson Brian F Madigan Re: a key question 09/14/2008 04:35 AM

(b) (5)

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD

09/13/2008 05:35 PM

Re: a key question

Bill,
(b) (5)

Brian ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Brian F Madigan/BOARD/FRS@BOARD a key question

09/13/2008 05:08 PM

Duplicate

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From: To: Subject: Date: Attachments:

William R Nelson William Walsh Fw: Failure of an insurance company 09/14/2008 04:43 AM naicfrs.pdf

Hi Bill. Is this the study? Sorry I overlooked your email earlier. --Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

----- Forwarded by William R Nelson/BOARD/FRS on 09/14/2008 04:40 AM ----Jon D Greenlee/BOARD/FRS

To

09/13/2008 12:55 PM cc Subject

William B English/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD Failure of an insurance company

Here is a paper that some of my staff worked on a few years ago that draws the comparison between resolving a bank and an insurance company. There have been failures in the past (Equitable for example) and I am working to get additional info on those situations that might be helpful. Jon

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

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Report of the National Association of Insurance Commissioners (NAIC) and the Federal Reserve System Joint Troubled Company Subgroup

A Comparison of the Insurance and Banking Regulatory Frameworks for Identifying and Supervising Companies in Weakened Financial Condition
April 19, 2005 For Information Only
This report was prepared for the NAIC’s Financial Condition (E) Committee and for the Federal Reserve System by the following Subgroup Members:
Steve Johnson, Pennsylvania Insurance Department Barbara Cornyn, Federal Reserve Board Bob Dynan, Massachusetts Division of Insurance Cynthia Martin, Federal Reserve Bank of Boston Jim Armstrong, Iowa Division of Insurance Wayne Johnson, Florida Department of Financial Services Randy Blumer, Wisconsin Office of Commissioner of Insurance Roger Peterson, Wisconsin Office of Commissioner of Insurance Doug Hartz, NAIC Legal Jeff Johnston, NAIC Financial Regulatory Services David Vacca, NAIC Financial Regulatory Services

This document is a working paper composed by staff of the state insurance departments, the NAIC and the Federal Reserve System participating on the NAIC and Federal Reserve System’s joint Troubled Company Subgroup and does not necessarily express any official views of the state insurance departments, the NAIC or the Federal Reserve System.

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This page is intentionally left blank for printing purposes.

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TABLE OF CONTENTS

Topic

Page

Introduction -------------------------------------------------------------------------------------------------- 1 Background on the Gramm-Leach-Bliley Act (GLB Act) -------------------------------------------- 3 Overview of Frameworks for Supervising Insurance and Banking Organizations----------------- 5 Insurance ---------------------------------------------------------------------------------------------- 5 Banking ----------------------------------------------------------------------------------------------- 8 Tools for Identifying Financially Weakened Companies---------------------------------------------10 Insurance ---------------------------------------------------------------------------------------------10 Financial Reporting -----------------------------------------------------------------------10 Solvency Screening and Financial Analysis Systems--------------------------------11 State Insurance Department Financial Examination Process --------------------- 13 Regulatory Capital Framework for Insurance Companies --------------------------14 Databases and Information Systems ---------------------------------------------------15 Banking (State Member Banks and Bank Holding Companies) -----------------------------16 Financial Reporting-----------------------------------------------------------------------16 Surveillance and Monitoring ------------------------------------------------------------16 Bank Examinations and BHC Inspections --------------------------------------------17 Regulatory Capital Frameworks --------------------------------------------------------18 Databases and Information Systems ---------------------------------------------------20 Approaches for Supervising a Financially Weakened Company ------------------------------------21 State Insurance Departments ----------------------------------------------------------------------21 Federal Reserve System ---------------------------------------------------------------------------22 Receivership and Liquidation ----------------------------------------------------------------------------24 State Insurance Supervisors -----------------------------------------------------------------------24 Bank Supervisors ---------------------------------------------------------------------------------- 25 Conclusion --------------------------------------------------------------------------------------------------26 Summary of State Regulation for Identifying and Supervising Financially Weakened Insurers --------------------------------------------------------------------- Appendix A Summary of Framework for Identifying and Supervising Financially Weakened State Member Banks and Bank Holding Companies ------------------------------------- Appendix B

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INTRODUCTION The National Association of Insurance Commissioners (NAIC) and the Federal Reserve System (FRS) joint Troubled Company Subgroup (Subgroup) was formed in 2000.1 The Subgroup’s objective was to compare insurance and banking regulatory frameworks for identifying and supervising companies in weakened financial condition, and was one of four joint subgroups established by the NAIC and the FRS to address implementation of the Gramm-Leach-Bliley Act (GLB Act) enacted in November 1999.2 The GLB Act facilitated the already growing integration of the insurance, banking and securities sectors by permitting wider latitude for insurance companies, banks and securities firms to operate within a single financial holding company (FHC), and mandated the coordinated supervision of entities within an FHC by the financial sector regulators. The joint efforts of the insurance and banking supervisors over the past several years have provided a foundation for effective communication and coordination between the state insurance departments and the FRS consistent with the GLB Act. Topics presented and discussed by Subgroup members and guest speakers included: 1) regulatory financial reporting frameworks; 2) off-site surveillance and monitoring including “early warning systems” for identifying supervised companies having weak or deteriorating financial conditions; 3) on-site examinations; 4) corrective action plans; 5) enforcement powers; 6) risk-based capital (RBC) frameworks; 7) resolution processes for failing and failed insurance companies and banks; and 8) the FRS’s role as umbrella supervisor for FHCs. Separately, in connection with this initiative, staff of the Federal Deposit Insurance Corporation (FDIC) presented a summary of that agency’s resolution procedures to the NAIC task force members. In comparing the two frameworks of law, regulation, policy and procedures, the Subgroup members and other discussants stressed that the specific supervisory approaches taken for any given financially weakened insurance or banking company are dependent upon the specific facts and circumstances as well as upon the respective supervisory frameworks. The Subgroup found that the frameworks for identifying and supervising financially weakened companies used by state insurance regulators and the FRS have many similarities. For example, both the state insurance departments and the FRS:
The Subgroup’s initiative was conducted by staff from several state insurance departments, the NAIC, the Board of Governors of the Federal Reserve System (Federal Reserve Board) and the Federal Reserve Bank of Boston under the auspices of the NAIC’s Financial Condition (E) Committee. The Subgroup, which was originally established under the NAIC Coordinating with Federal Regulators Working Group now reports up through the NAIC Financial Analysis Working Group (FAWG) of the NAIC Financial Condition (E) Committee. 2 Unless otherwise noted, the banking supervisory framework presented in this paper is the approach used by the FRS as it pertains to state member banks and bank holding companies (BHCs). The FRS also has supervisory responsibility for certain U.S. bank branches and certain other U.S. banking offices of foreign banking organizations (FBOs); however, the scope of this summary does not include FBO supervision. Additionally, the scope of this summary was generally limited to financial soundness monitoring and the supervision of financially weakened institutions. Comparisons of frameworks for identifying and correcting issues pertaining to compliance with consumer protection regulations were also beyond the scope of this summary.
1

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• •

• • • •

generally require supervised institutions to file detailed quarterly financial condition and income reports, related supplementary information, and information identifying affiliated entities of an insurer or a bank; conduct routine off-site monitoring of supervised companies other than small, noncomplex BHCs, in part based upon information contained in regulatory reports, and also using market information, to assist in early identification of financially weakened companies and in allocating on-site examination resources; have minimum capital standards, including an RBC framework that requires regulatory intervention when capital of a supervised insurance company or insured bank falls below a designated level;3 impose limitations on and reporting requirements related to certain transactions within holding company systems, including certain acquisitions of or by a supervised entity; may require a financially weakened, supervised company to develop written corrective action plans and submit progress reports on compliance with plans; and may take various other supervisory actions against a financially weakened company, including imposing restrictions on activities.

The Subgroup also identified three broad phases of supervisory activities as follows: 1) conducting both off-site monitoring of financial condition using financial statement and market information analysis, and on-site examinations; 2) implementing corrective action plans for financially weakened companies; and 3) undertaking insolvency proceedings (generally the responsibility of the FDIC for bank insolvencies). The attached Appendices A and B contain summary information regarding the insurance and banking regulatory processes for identifying and supervising financially weakened insurance and banking organizations.

State insurance departments and certain bank regulators are responsible for handling insurance company and bank insolvencies, respectively; insolvencies of insurance holding companies and BHCs are handled under federal bankruptcy laws.

3

2

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BACKGROUND ON THE GLB ACT The GLB Act amendments to the Bank Holding Company Act of 1956 (BHC Act) authorized a qualifying bank holding company (BHC) to operate as an FHC and to engage in a diversified range of financial activities, including insurance sales, insurance underwriting, securities underwriting and dealing, acting as a futures commission merchant, and engaging in merchant banking. To qualify as an FHC, each of the BHC's depository institution subsidiaries must be well capitalized and well managed and each of the BHC’s insured depository subsidiaries must have received at least a “Satisfactory” Community Reinvestment Act (CRA) rating in its most recent CRA examination.4 Those insurance activities that are permitted to be conducted by an FHC include insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death; providing and issuing annuities; and acting as principal, agent, or broker for the foregoing activities. Permissible activities also include those that the Federal Reserve Board and the Secretary of Treasury jointly determine to be financial in nature or incidental to financial activities, or that the Federal Reserve Board determines are complementary to a financial activity and do not pose a substantial risk to the safety and soundness of depository institutions or the financially system generally. Under the GLB Act, state regulation of insurance is preserved. A state law applicable to insurance may be preempted, however, if it prevents or restricts a depository institution or a depository institution affiliate from engaging in any activity authorized under the GLB Act. For instance, state laws relating to insurance sales, solicitation and crossmarketing activities may not prevent or significantly interfere with the ability of a bank or bank affiliate to engage in insurance sales activities. With limited exceptions that existed prior to the passage of the GLB Act, insurance underwriting activities of an FHC may only be conducted by the FHC parent company or by a nonbank subsidiary of the FHC. A bank and its subsidiaries are generally precluded from insurance underwriting, other than the underwriting of credit life and credit health products. As set forth in the GLB Act, general insurance sales may be conducted by an FHC parent company or a nonbank subsidiary of the FHC, or by a financial subsidiary of a bank. The GLB Act did not change the authority for national or state-chartered banks to sell or underwrite insurance directly. Federal banking laws, however, generally continue to limit insurance underwriting activities of banks to credit-related underwriting activities. Most state banking laws now permit state-chartered banks to sell general insurance. The Federal Reserve Board is the umbrella supervisor of BHCs, including FHCs. In accordance with the GLB Act, the Federal Reserve Board is to rely to the fullest extent possible on reports of examination made by the applicable functional securities and
A CRA rating is an indicator of how well the depository institution has met its legal requirement to serve its community, in accordance with applicable laws and regulations. CRA examinations are conducted by a depository institution’s primary federal banking regulator.
4

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insurance regulators, including for any licensed insurance company and any other subsidiary that the Federal Reserve Board finds to be comprehensively supervised by a federal or state authority. If information that is needed to assess the risk of a functionally regulated subsidiary of a banking organization is not available from the functional regulator, the Federal Reserve Board may examine a functionally regulated subsidiary of a BHC only if: the Federal Reserve Board has reasonable cause to believe that such subsidiary is engaged in activities that pose a material risk to an affiliated depository institution; the Federal Reserve Board reasonably determines, after reviewing relevant reports, that examination of the subsidiary is necessary to adequately inform the Board of the systems for monitoring and controlling operational risks that may pose a threat to the safety and soundness of a depository institution subsidiary of the BHC; or, based on reports and other available information, the Federal Reserve Board has reasonable cause to believe that the subsidiary is not in compliance with the GLB Act or any other federal law that the Federal Reserve Board has jurisdiction to enforce against such subsidiary, and the Federal Reserve Board cannot make such a determination through examination of the affiliated depository institution or the bank holding company.

4

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OVERVIEW OF FRAMEWORKS FOR SUPERVISING INSURANCE AND BANKING ORGANIZATIONS Insurance The primary objective of insurance regulation is to correct market failures that would otherwise cause insurers to incur an excessive risk of insolvency or engage in market abuses that hurt consumers. Significant state insurance department regulatory resources are employed to monitor market behaviors, compliance, and solvency. Each state, the District of Columbia, and the U.S. territories5 are responsible for regulating the insurance business within their own jurisdictions. Each state maintains its own insurance department, which operates under the supervision of a commissioner, director, or superintendent who is either appointed or elected. Some states have combined the regulation of insurance, banking, and securities, activities under one department or office. The NAIC, formed in 1871, is a private, non-profit, voluntary association of the chief insurance regulatory officials of the 50 states, the District of Columbia, and the four U.S territories (American Samoa, Guam, Puerto Rico, and the Virgin Islands). The NAIC provides its members with a forum for discussing common interests and for working cooperatively on regulatory matters that transcend the boundaries of their own jurisdictions. The NAIC is not a regulatory body or a trade association, but is instead an organization whose members consist solely of insurance regulators for the purpose of facilitating communication and interaction among insurance regulators to enhance insurance regulation and establish national standards, where appropriate. The objective of the NAIC is to serve the public interest by assisting state insurance supervisory officials, individually and collectively, in achieving the following fundamental insurance regulatory objectives: 1) protect the public interest, promote competitive markets and facilitate the fair and equitable treatment of insurance consumers; 2) promote the reliability, solvency and financial solidity of insurance institutions; and 3) support and improve state regulation of insurance. The primary means for NAIC members to be actively involved in the association is through the NAIC committee system. Each commissioner serves, or delegates to state insurance department staff, the responsibility to serve on various NAIC committees, task forces and working groups. The NAIC is committed to conducting its business openly, subject to the discretion of the chairpersons of committees, subcommittees, tasks forces, working groups and subgroups, who may determine those situations in which public discussions would not be appropriate. The NAIC coordinates and assists state solvency efforts in a number of ways, including: 1) maintaining extensive insurance databases and a computer network that are assessable
The fifty states, the District of Columbia, and the U.S. territories are collectively referred to as “states” in this document.
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to all state insurance departments; 2) analyzing and informing regulators as to the financial condition of insurance companies; 3) coordinating examinations and regulatory actions with respect to financially weakened companies; 4) establishing and certifying states’ compliance with minimum financial regulation standards through the NAIC’s Financial Regulations Standards and Accreditation Program (Accreditation Program); 5) providing financial, reinsurance, actuarial, legal, computer and economic expertise to state insurance departments; 6) valuing securities held by insurers; 7) analyzing and listing nonadmitted alien insurers;6 8) developing uniform statutory financial statements and accounting rules for insurers; 9) conducting education and training programs for insurance department staff; 10) developing model laws and coordinating regulatory policy on significant insurance issues; and 11) conducting research and providing information on insurance and its regulation to regulators, state legislators, Congress, U.S. government agencies, insurance regulators in other countries, and the general public. In June 1989, the NAIC adopted the Financial Regulation Standards (the Standards), that established baseline sound practices for an effective regulatory system in each insurance department. The Standards are applied through a formal, voluntary certification program administrated by the NAIC. The objective of the Accreditation Program is to provide a process whereby solvency regulation of multi-state insurance companies can be enhanced and adequately monitored by the states. The Standards are grouped into three areas: 1) laws and regulations; 2) regulatory practices and procedures; and 3) organizational and personnel practices. Under this Accreditation Program, an independent team of experienced consultants reviews each insurance department’s compliance with the Standards at least every five years. All states have enacted legislation designed to achieve compliance with the Standards, and as a result, insurance department budgets and staffing have increased significantly. As of March 1, 2005, 49 states and the District of Columbia were accredited under the Accreditation Program. Insurance companies are chartered by individual jurisdictions and receive a certificate of authority (that is, a license) to conduct business from each jurisdiction in which the company desires to underwrite insurance. This has been the case since 1792, when chartered insurance companies were first required by the states to limit company activities and investments, and to file financial statements. The power of a state to regulate insurance was established in 1869 in Paul v. Virginia, where insurance was

A nonadmitted insurer is a company not licensed by a state to sell insurance policies within the state. Alien insurers are those formed according to the legal requirements of a foreign country. In order for an alien insurer to conduct operations and sell its products in a particular state, the insurer must conform to the state’s rules and regulations governing insurance companies. A nonadmitted alien insurer may be allowed to write on a surplus lines basis if it complies with the state’s eligibility requirements. To assist states in their review of nonadmitted alien insurers, the NAIC produces a Quarterly Listing of Nonadmitted Alien Insurers (the Listing). If an insurer appears in the Listing, it has filed specified documents with the NAIC International Insurers Department (IID) and, based upon these documents and other information, appears to fulfill the criteria for eligibility set forth by the NAIC. Several states utilize the Listing to some capacity within their respective state statutes or regulations in relation to their eligibility requirements.

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declared a local matter rather than commerce between the states. By 1870, many of the states had appointed a state official to oversee insurance. In 1944, the U.S. Supreme Court in United States v. South-Eastern Underwriters Association ruled that insurance was “commerce” and subject in its interstate activity to regulation by the Congress and the statutory restriction of the Sherman Act prohibition against restraint of trade. In 1945, however, Congress enacted the McCarran-Ferguson Act, which included a limited exception from certain antitrust laws for certain insurancerelated activities. The McCarran-Ferguson Act generally made insurance subject to state control and withheld the application of federal statutes to the extent that state law regulated such business, except in instances where the federal law specifically relates to insurance. The states issue a number of different insurance company license types, including life and health, and property and casualty licenses. The states also issue insurance producer license types, including broker, independent agents, managing general agents, and general agent licenses.7 Reinsurers may either be authorized or licensed to write reinsurance business depending on the states laws and regulations. Under state insurance law, provided the owner meets certain criteria through the regulatory approval process, there are very few outright restrictions on a licensed insurer’s ownership by, or affiliation with, other financial or non-financial companies. An exception is the general prohibition on foreign government ownership of an insurer. State insurance law does not provide for consolidated supervision of the insurance holding company or the parent holding company. However, an insurance company is subject to state restrictions and disclosures regarding inter-affiliate relationships, and change in ownership is subject to state insurance department approval. Under state law, a licensed insurance company is generally authorized to own subsidiaries that conduct insurance or insurance-related business activities, including real estate management and real estate development. Investments in higher risk activities are limited by state statutes and indirectly through statutory RBC minimum standards. State insurance regulators have recognized a growing need to more fully coordinate their regulatory efforts with other state insurance regulators, including efforts for sharing confidential supervisory information. Historically, there has been significant coordination with respect to supervising financially weakened companies; similar efforts are also underway to focus on holding company systems or insurance groups that are financially strong. In 2000, the NAIC formed the Insurance Holding Company (E) Working Group (IHCWG) in an effort to document a framework for information sharing and coordination of regulatory processes for analyzing insurance holding companies and their insurance subsidiaries. The NAIC Framework for Insurance Holding Company
An independent agent is a contractor who represents more than one insurance company when placing a client’s business. A general agent is a person appointed by one insurer who is responsible for insurance agency operations in a particular geographical area, including the sale of life and health insurance, recruiting and training agents, and providing administrative support.
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Regulation (Framework) is the result of the IHCWG’s work. The Framework provides guidance for state insurance regulators to understand the holding company structure of insurers operating in their state, as well as to coordinate their supervisory approaches for reviewing holding company transactions that may impact insurance subsidiaries domiciled in multiple jurisdictions. Currently, this Framework is in the implementation stage. Banking The FRS is the primary federal banking regulator for state member banks. It also has supervisory authority for all U.S. bank holding companies. In the U.S., commercial banks are either federally chartered by the Comptroller of the Currency (OCC) as national banks, or are chartered by a state. National banks are supervised by the OCC and are members of the FRS. State-chartered banks that are members of the FRS are referred to as state member banks, and are supervised by both the applicable state banking department(s) and the FRS. A state bank that does not choose to become a member of the FRS is referred to as a state nonmember bank and is supervised by both the applicable state banking department(s) and the FDIC. The OCC, FRS and FDIC are the primary federal bank supervisors for national banks, state member banks and state nonmember banks, respectively. A “dual banking system” exists in the U.S. whereby state-chartered banks have both a federal bank and a state bank regulator(s).8 Therefore, the FRS actively coordinates its supervision of state member banks with the applicable state banking department(s). Prior Federal Reserve Board approval is required for a company to initially become a BHC or for an existing BHC to acquire control of, or more than five percent of a class of voting securities of, additional BHCs or banks. Relevant federal statutes state that control of a BHC or bank exists when a company has (i) ownership, control, or power to vote 25 percent or more of the outstanding shares of any class of voting securities of the BHC or bank, directly or indirectly or acting through one or more other persons; (ii) control in any manner over the election of a majority of the directors, trustees, or general partners (or individuals exercising similar functions) of the BHC or bank; or (iii) the power to exercise, directly or indirectly, a controlling influence over the management or policies of the BHC or bank. A company includes corporations, partnerships, associations, certain trusts, and similar organizations. Also, non-financial firms generally are prohibited from controlling banks and thus are prohibited from owning 25 percent or more of the voting stock of a bank. The FRS has supervisory authority over BHCs, including those that are FHCs, and supervises these entities on a consolidated basis. The FRS supervisory approach reflects the “source of strength” doctrine, which asserts that a BHC should serve as a source of financial and managerial strength to its subsidiary banks, within certain constraints. This doctrine was reconfirmed in the GLB Act, except that the Act indicates that the FRS cannot require a BHC that is an insurance company, or an insurance company that is an
8

A state-chartered bank may be subject to supervision in all states in which it operates.

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affiliate of a depository institution, to provide funds or other assets to the affiliated depository institution if the state insurance authority makes a determination, in writing, that such action would have a material adverse effect on the financial condition of the insurance company. The FRS is comprised of 12 regional Federal Reserve Banks under the general oversight of the Federal Reserve Board, which is located in Washington, D.C. The Federal Reserve Board and its staff develop FRS regulations and policies. The Federal Reserve Board is an independent government agency overseen by 7 board members, including the Federal Reserve Board Chairman and Vice Chairman, all of whom are appointed by the president and confirmed by the Senate. Each Federal Reserve Board member is appointed to serve a 14-year term, or if replacing a board member whose term has not yet expired, to serve the remainder of the previous board member’s 14-year term. The Federal Reserve Board Chairman has a 4-year term, and may be reappointed. In carrying out responsibilities for the comprehensive supervision of BHCs, including FHCs, the FRS coordinates and cooperates, as appropriate, with the other bank and thrift regulators, including the OCC, the FDIC, the Office of Thrift Supervision (OTS), and state banking departments. The Federal Financial Institutions Examination Council (FFIEC), whose members consist of the FRS, OCC, OTS, FDIC and National Credit Union Administration (NCUA), is an organization that fosters uniform depository institution regulatory reporting and consistent supervisory policy among those federal agencies. Moreover, federal and state bank and thrift supervisors share certain databases and other supervision tools and resources in order to develop coordinated and consistent regulation of supervised entities. Additionally, in carrying out its role as the consolidated supervisor for BHCs, including FHCs, the FRS also relies on and coordinates its supervisory activities with, as appropriate, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission, and state insurance and securities regulators.

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TOOLS FOR IDENTIFYING FINANCIALLY WEAKENED INSTITUTIONS Insurance Financial Reporting The NAIC reporting requirements have evolved considerably since its annual statement introduction in 1879. All states require an insurer to use the NAIC annual and quarterly statement reporting forms to satisfy their statutory financial statement filing requirements, except that states may exempt an insurer from this requirement, as appropriate. The complete annual statement filing currently includes a balance sheet, income statement, statement of cash flow, notes to financial statements, general interrogatories,9 and a significant number of supporting details in various exhibits, schedules and supplemental filings. Some of the more important exhibits and schedules provide information about: investment income and realized gains and losses; nonadmitted assets; Asset Valuation Reserve and Interest Maintenance Reserve; premiums and losses; expenses; long-term investments in bonds, preferred stock, common stock, real estate, mortgage loans, and other investments; derivatives; short-term investments; cash and cash equivalents; reinsurance; and transactions with affiliates. Supplemental filings are also required of most insurers, such as the actuarial opinion, the management’s discussion and analysis, the annual audited financial report, and the RBC report. Other supplemental filings include specialty information such as the Medicare supplement report, the credit insurance report, and the long-term care report. Since December 31, 2003, insurers are also required to report affiliations with a BHC, bank, thrift or securities firm; to provide the names of each such affiliate; and to identify the relevant federal regulators of each insurer’s financial institution affiliate. In addition to the annual statements, most insurers also are required to file the NAIC quarterly statement reporting form that contains key information on assets and liabilities; income and surplus; changes in investments; reinsurance; premiums written; losses and reserves. Insurance company statutory financial reports are based on statutory accounting principles (SAP), which are designed to address the concerns of regulators. SAP stresses measurement of the ability to pay claims of insurers in the future, while generally accepted accounting principles (GAAP) stresses measurement of earnings of a business from period to period, and the matching of revenues and expenses for the measurement period.10 Conservatism serves as a major principle in SAP. For example, some assets are not allowed to be included in an insurer’s surplus; these are referred to as nonadmitted assets. Another example of conservatism is the prohibition against discounting reserves, and the fact that specific tables approved by regulators are required to establish reserves for various life insurance products. Under GAAP, the experience expected by each insurance company, with provision for the risk of adverse deviation, is used to determine the reserves it will establish for its policies.
General interrogatories are limited-scope questions regarding an insurer and its financial position and operations. 10 Source: Preamble of the NAIC Accounting Practices and Procedures Manual.
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Solvency Screening and Financial Analysis Systems The fundamental objective of insurance company solvency monitoring is to ensure that companies meet regulatory standards and to alert regulators if actions need to be taken to protect policyholders. To accomplish this task, the state insurance regulators conduct financial analysis using regulatory financial reports, financial tools and other sources of information to detect problems that may jeopardize a company’s long-term viability. These sources include SEC filings, corporate reports, external, independent certified public accountant (CPA) attestation reports, financial examination and market conduct reports, rate and policy form filings, consumer complaints, independent rating agency reports, correspondence from agents and insurers, and business media. State insurance departments generally prioritize the review of their domiciliary companies based on a system of financial ratios and other screening tools, including those maintained by the NAIC. The NAIC has created a network of financial information systems and tools, such as the Financial Analysis Solvency Tools (FAST) System that includes the Insurance Regulatory Information System (IRIS), the Scoring System, and the Insurer Profiles System that are discussed below. The NAIC makes the information systems and tools available to state insurance regulators over the NAIC’s Internet-State Interface Technology Enhancement (I-SITE). I-SITE provides a common user interface for more than 50 applications that are used to produce a wide variety of standard and custom reports. To be accredited, a state is required to conduct quarterly financial analysis on their domiciliary multi-state insurers. Most states conduct quarterly financial analysis on their single-state insurers as well. Typically, insurers with anomalous results, or those that have been previously identified for attention are subject to additional analysis. The domiciliary state is relied upon as the primary solvency regulator. When there are concerns about the financial condition of an insurer, communications between the domiciliary state and the other states in which the company is licensed are increased. However, any state in which a company is licensed to conduct insurance business may perform its own monitoring, financial examinations, and may take regulatory action, as appropriate. FAST System The FAST System is a collection of analytical tools designed to provide state insurance regulators with an integrated approach to screening and analyzing the financial condition of insurance companies. The following are three key tools within the FAST System: 1) Insurance Regulatory Information System (IRIS) IRIS has served as a baseline solvency screening system for the NAIC and state regulators since the mid-1970s. IRIS is designed to help regulators prioritize insurers for detailed financial analysis. The “statistical phase” of IRIS involves

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calculating a series of financial ratios for each insurer based on its annual statement data. The IRIS ratio results are available to the public. Because the ratios by themselves are not indicative of adverse financial condition, an experienced team of state insurance examiners and analysts (Analyst Team) reviews the IRIS ratio results and various other financial information in the “analytical phase” of IRIS, called the Analyst Team System (ATS). For the ATS, the Analyst Team meets annually at the NAIC Executive Headquarters to identify insurers that appear to require immediate regulatory attention in order to assist state insurance regulators in prioritizing their annual financial analysis reviews of insurers. The Analyst Team reviews a computerselected priority listing of insurers that may be experiencing weak or declining financial results. It then validates the listing based on further analysis of those companies, and provides a brief synopsis of its findings in a document that can be accessed only by state insurance regulators and authorized NAIC staff. 2) Scoring System The Scoring System is based on several financial ratios and is similar in concept to IRIS ratios. The Scoring System, however, includes a broader range of financial ratios and assigns a score to each ratio based on the level of solvency concern each result generates. The ratio results and scores are available only to state insurance regulators and authorized NAIC staff. The Scoring System is evaluated and updated, as appropriate, by the Financial Analysis Research and Development Working Group on an annual basis. 3) Insurer Profiles System The Insurer Profiles System produces quarterly and annual profiles reports on property and casualty, life and health insurers. These profiles provide either a quarterly or annual five-year summary of a company’s financial position. The Insurer Profile reports provide not only a snapshot of the company's financial statement, but also include analytical tools such as financial ratios and industry aggregate information that can be used in an analyst's review of the company. Insurer Profile reports can assist state insurance department analysts in identifying unusual fluctuations, trends or changes in the mix of an insurer's assets, liabilities, capital and surplus and operations. Peer Review Process As a check and balance on the solvency screening efforts conducted by the states, a peer review process was created. The objective of the NAIC’s peer review process conducted by the FAWG is to monitor whether domiciliary regulators are taking appropriate and effective supervisory action with respect to nationally significant insurers that are in financial difficulty. The FAWG is made up of commissioner appointed members from sixteen states.

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On a quarterly basis, the NAIC’s Financial Regulatory Services Division staff identifies nationally significant insurers for review using analytical criteria. Division financial analysts perform preliminary reviews of identified insurers and then select insurers that warrant more in-depth reviews. For those insurers, the FAWG will review the analysts’ reports and then query the domiciliary state on various aspects of each insurer’s financial condition and any regulatory actions being taken. If the FAWG determines that the domiciliary regulator is taking appropriate actions, then the FAWG may close the file or continue to monitor the company. If the FAWG determines that further measures are desirable, it will recommend the appropriate corrective action to the domiciliary state. If the domiciliary regulators fail to follow the FAWG’s recommendation, the FAWG will alert other affected states accordingly and coordinate their supervisory response. State Insurance Department Financial Examination Process The purpose of a financial condition examination is to: 1) detect insurers with potential weaknesses; 2) determine compliance with state statutes and regulations; and 3) compile information needed for timely, appropriate regulatory action. On-site financial condition examinations of insurers are either full-scope or limited-scope examinations. The fullscope examination is considered a comprehensive examination with an overall objective to report on the company’s financial position and affairs. A limited-scope examination, often referred to as a target examination, is conducted to review specific financial accounts and or specific areas of the company’s operations. State laws and regulations, as guided by the Accreditation Program, require the states to conduct a full-scope examination for each multi-state domestic company at least once every five years. Individual state statutes may require financial condition examinations more often, and several states impose a three-year requirement. Limited-scope examinations do not satisfy the NAIC Accreditation Standards to conduct financial condition examinations at least once every five years. However, failing to conduct limited-scope examinations for financial weakened companies may impact the results of the accreditation review. Frequently, full-scope examinations will be conducted as so called “zone examinations.” A zone examination is a process to reduce the number of financial condition examinations of multi-state licensed insurers. The concept of zone examinations developed in response to the fact that states are entitled to conduct financial condition examinations on insurers that are licensed in their state regardless if they are domiciled elsewhere. As this ability could result in multiple examinations of the same company, the process of inviting representatives from other zones to participate evolved in order to reduce regulatory burden and increase efficiency. On-site financial condition examinations investigate a company’s accounting methods and procedures, financial statement presentation, and validate what is presented in the annual financial statement assets, liabilities, capital and surplus line items, to ascertain whether the company is in good financial standing. The main thrust of the examination is

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to verify the company’s solvency and determine whether the company has complied with state laws and regulations. In general, financial condition examinations shall at least encompass a review of all of the following matters: 1) company history; 2) management and control; 3) corporate records; 4) fidelity bonds and other insurance; 5) officers’, employees’, and agents’ welfare and pension plans; 6) territory and plan of operation; 7) growth of company; 8) business in force by states; 9) mortality and loss experience; 10) reinsurance; 11) accounts and records; and 12) financial statements. Examinations are conducted using a risk-based approach, whereby those areas identified as more likely to be prone to material financial reporting error are accorded greater attention during both the examination planning phase and the on-site examination. The state financial condition examination process also places emphasis on the quality of the company’s internal control structure. This requires the state examiners to assess the internal control environment based on interviews with company management and personnel and other control testing procedures. On occasion, state insurance departments will engage outside experts to evaluate and test the effectiveness of internal controls (e.g., information system controls). The financial condition examination process also considers the work performed by external, independent CPAs as well as the work of internal auditors. Regulatory Capital Framework for Insurance Companies An insurer’s capital and surplus provides a cushion against unexpected increases in liabilities and decreases in the value of assets, and are intended to absorb the costs of a rehabilitation or liquidation with minimal losses to policyholders and claimants. States require insurers to have a certain amount of capital and surplus to establish and continue operations. A state insurance department is authorized to take over, or “seize” an insurance company if the state can show to the applicable state court that the insurer will be unable to meet its obligations to policyholders. Fixed minimum capital and surplus standards for licensing and operating an insurance company typically range in the area of $2 million to $5 million for a multi-line life and health or property and casualty insurer. Because of the limitations of fixed minimum capital standards, the NAIC adopted the Risk-based Capital (RBC) for Insurers Model Act. To be accredited, a state is required to adopt a substantially similar version of the Model Act, which contains separate formulas for life and health insurers and property and casualty insurers, and prescribes regulatory action to be taken if an insurer’s Total Adjusted Capital declines below certain thresholds. The stated objectives of the NAIC RBC requirements are to provide a standard of capital adequacy that: 1) is related to risk; 2) raises the safety net for insurers; 3) is uniform among states; and 4) provides authority for regulatory action when actual capital falls below the standard. The model act specifies four levels of company and regulatory action, with more severe action required at lower levels. The NAIC’s life and health RBC formula encompasses six major categories of risk: 1) asset risk — affiliates; 2) asset risk – common stock; 3) asset risk — other; 4) insurance

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or pricing risk; 5) interest-rate risk and health credit risk and 6) business risk. The risks addressed by the NAIC’s property and casualty formula include: 1) asset risk — subsidiary insurance companies; 2) asset risk — fixed income; 3) asset risk — equity; 4) asset risk — credit; 5) underwriting risk — reserves; and 6) underwriting risk — net written premium. Databases and Information Systems The NAIC maintains a number of databases that state insurance regulators and NAIC staff use for financial analysis and other regulatory functions, including: 1) the Financial Data Repository (FDR); 2) the State Producer Licensing Database (SPLD); 3) Valuation of Securities (VOS); 4) Regulatory Information Retrieval System (RIRS); and 5) Special Activities Database (SAD). The NAIC financial databases serve as the core resource of the solvency surveillance and other analysis activities of state insurance regulators and the NAIC. The FDR database contains the most recent 10 years of annual and quarterly financial statement information for the approximately 5,200 U.S. insurance companies. This database provides source data for reports on individual companies and for analytical tools, such as the FAST System. The VOS database contains credit quality designations and fair values for insurers' securities that are not rated and monitored by a Nationally Recognized Statistical Rating Organization (NRSRO). This database, combined with NRSRO ratings data, allows regulators to assess the relative credit risk of the securities owned and reported by insurers. The SPLD database contains information on insurance companies, such as consumer complaints, and on nearly 3.5 million individual producers, including producer licensing and appointment information. RIRS database contains formally adjudicated regulatory actions taken by participating state insurance departments against insurance producers, companies and other entities engaged in the business of insurance. The SAD is a confidential database that contains information related to suspicious market activities and legal actions involving entities engaged in the business of insurance. The RIRS and SAD databases enhance state insurance regulators’ ability to share information among state insurance departments on individuals or companies suspected of illegal or questionable activities and are tools to assist in the prevention of movement of these activities into new areas. State insurance regulators and NAIC staff also use an electronic mail system on the NAIC’s computer network to communicate and coordinate supervisory developments with respect to examinations, regulatory actions, financially weakened companies, and a variety of other matters.

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Banking (State Member Banks and BHCs) Financial Reporting All banks, including state member banks, are required to file quarterly regulatory reports known as FFIEC Call Reports consisting of consolidated balance sheets, income statements, RBC data and selected supplementary financial information. All BHCs are also required to file periodic regulatory reports. Those BHCs with consolidated assets over $150 million, and BHCs below that threshold that are categorized by the FRS as “complex,” are required to file consolidated balance sheets, income statements and RBC data, as well as parent company financial statements, on a quarterly basis. BHCs under $150 million that are non-complex BHCs are required to file parent company only financial statements semi-annually, but are not required to file fully consolidated financial reports. Additionally, all BHC are required to file periodic regulatory reports detailing certain intercompany transactions and balances between a bank and its nonbank affiliates; balance sheet and income statement data for certain of its domestic, nonfunctionally regulated nonbank subsidiaries and certain foreign domiciled bank and nonbank subsidiaries; and reports of new activities commenced. There are a number of other regulatory reports that must be filed by state member banks and BHCS.11 Surveillance and Monitoring The FRS off-site surveillance program is designed to monitor the financial condition and performance of individual state member banks and BHCs on a quarterly basis to facilitate identifying deterioration in the condition of companies between on-site examinations and inspections. Monitoring is accomplished, in part, through the use of automated screening systems and econometric models. These tools rely significantly on data reported on standardized regulatory reports and from the findings of on-site examinations. The surveillance program takes into consideration a number of aspects of banking performance, including capital adequacy, asset growth, loan quality and loan concentrations, liquidity, and capital markets activities. These surveillance results, produced by Federal Reserve Board staff, are distributed to the Federal Reserve Banks for further review, analysis, and follow-up. FRS Surveillance screens incorporate the results of two econometric models, together known as the System for Estimating Examination Ratings (SEER).12 The SEER risk rank model estimates the probability that a bank will become critically undercapitalized within the next two years. The SEER rating model estimates a bank’s composite CAMELS
A complete listing of bank and BHC report forms and instructions may be found on the Federal Reserve Board and the FFIEC websites (http://www.federalreserve.gov/ and http://www ffiec.gov/, respectively). 12 The SEER system developed by a FRS Surveillance Task Force was formerly known as the Financial Institutions Monitoring System (FIMS). The SEER models have been updated since they were first implemented, but a detailed description of the econometric frameworks used is contained in an article by Rebel Cole, Barbara Cornyn and Jeff Gunther in the Federal Reserve Bulletin, volume 81, number 1, January, 1995, pps. 1-15.
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rating based upon Call Report data and examination rating information. The surveillance screening results are strictly confidential. To support off-site monitoring of bank performance and condition and on-site examinations, the FFIEC produces a quarterly Uniform Bank Performance Report (UBPR) for each commercial bank and FDIC-insured savings bank. These reports display current and historic balance sheet and income statement items, along with key performance ratios and peer group statistics. The FRS produces a similar report, the Bank Holding Company Performance Report (BHCPR), for BHCs over $150 million in consolidated assets. These UBPR and BHCPR reports are publicly available. Bank Examinations and BHC Inspections The FRS’s safety and soundness examinations of state member banks and inspections of BHCs are focused on determining the financial condition and performance of an institution, and on evaluating management, internal controls and the risk management structure. The Federal Reserve is required to conduct a full-scope, on-site examination of every insured state member bank at least once during each 12-month period, with the exception that certain small institutions may be examined once during each 18-month period. The frequency of BHC inspections is determined by the size, condition, and complexity of the BHC. Examiners assign a composite rating to a banking institution reflecting an assessment of the overall condition of the institution, including an assessment of relevant processes and risk management techniques. As noted earlier, the rating system used for banks is known as CAMELS, an acronym for the components it evaluates: capital, asset quality, management, earnings, liquidity and sensitivity to market risk. Until January 1, 2005, BHCs were assigned a supervisory rating using a rating system known as BOPEC, which included evaluations of: bank subsidiaries (“B”); “other” (nonbank subsidiaries) (“O”); the parent company (“P”); consolidated BHC earnings (“E”); and consolidated BHC capital adequacy (“C”). A new BHC rating system has been adopted effective January 1, 2005.13 Under this system, a BHC is assigned an RFI/C(D) rating rather than a BOPEC rating. RFI/C(D) is an acronym for the components of: risk management (“R”); financial condition (“F”); potential adverse impact (“I”) of nonbank affiliates on the affiliated depository institution(s); a composite BHC rating (“C”) based on an evaluation and rating of the BHC’s managerial and financial condition and an assessment of future potential risk to its subsidiary depository institution(s); and a rating for the depository institution(s) (“D”) that will generally mirror the primary regulator’s assessment of the subsidiary depository institution(s). Bank and BHC supervisory ratings and the reports of bank examinations and BHC inspections are strictly confidential. FHCs are generally supervised similarly to any other BHC with a focus on understanding and assessing the quality of centralized risk management and control processes for key
SR letter 04-18, Bank Holding Company Rating System, may be accessed on the Federal Reserve Board’s public website.
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business lines, as well as understanding the intra-group exposures and risk concentrations across all business lines. To supervise a diversified BHC, the FRS relies to the extent possible on, and coordinates with, the appropriate functional regulators. Financial safety and soundness examinations and inspections generally include a review of compliance with a wide range of laws and regulations. In addition, the FRS also conducts consumer compliance examinations of state member banks to determine adherence with applicable consumer protection laws and regulations and assigns a compliance examination rating. Depository institutions, including state member banks supervised by the FRS, are also evaluated for their compliance with the CRA and assigned a separate CRA rating. An institution’s CRA rating is publicly available. Regulatory Capital Frameworks Basel Capital Accord The Basel Capital Accord (Basel I), the current international framework for bank capital adequacy, was adopted in 1988 by the G-10 group of central banks and other national supervisory authorities, working through the Basel Committee on Banking Supervision.14 The FRS and the other federal banking agencies implemented an RBC approach for U.S. banking organizations in 1989. The fundamental objectives of Basel I are to promote the soundness and stability of the international banking system and to provide an equitable basis for international competition among banks. More specifically, Basel I sets forth RBC standards intended to assist in the assessment of capital adequacy of depository institutions. Other key objectives of the standards were to: 1) make regulatory capital requirements more sensitive to differences in risk profiles among banks; 2) factor offbalance sheet exposures into the assessment of capital adequacy; 3) minimize disincentives to holding liquid, low-risk assets; and 4) achieve greater consistency in the evaluation of the capital of the major banks throughout the world.15 Under the Basel I framework, capital adequacy is assessed primarily in relation to credit risk with the other risks addressed implicitly. In 1996, Basel I was amended to take explicit account of market risk in trading accounts (i.e., the risk of loss due to a change in market prices, such as equity prices or interest or exchange rates). Under the Basel I framework, a bank (and, in the U.S., generally a BHC with consolidated assets greater than $150 million) is required to have regulatory capital, as measured by combinations of equity, allowance for loan and lease losses (ALLL), qualified subordinated debt, and certain other instruments, at least equal to 8 percent of
The Basel Committee on Banking Supervision was established in 1974 comprising members from the central banks or other supervisory authorities of Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom, and the U.S. 15 Additional detail and background on the FRS’s and the NAIC’s RBC approaches can be found in the Report of the NAIC and the Federal Reserve System Joint Subgroup on Risk-Based Capital and Regulatory Arbitrage, dated May 24, 2002.
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the amount of its risk-weighted assets. For the calculation, assets are weighted according to the level of perceived risk, and each off-balance sheet exposure is converted to an onbalance sheet equivalent, and then risk-weighted. Assets and off-balance sheet equivalents are generally risk-weighted at 100, 50, 20, or 0 percent. This measure is referred to as the total RBC ratio. Another measure of capital adequacy used in the banking organization RBC framework is the Tier 1 RBC ratio. The Tier 1 RBC ratio is a more conservative measure that generally excludes debt instruments and the ALLL from the capital numerator. To be adequately capitalized, a U.S. banking organization must have a minimum Tier 1 RBC ratio of 4 percent. In addition, banking organizations are subject to a leverage ratio measure to evaluate capital adequacy. The leverage ratio, which is calculated as equity capital as a percentage of average balance sheet assets, is also used to evaluate capital adequacy. Currently, a revised RBC framework referred to as the Basel II Capital Accord is in the process of being implemented by U.S. and many foreign bank regulators. The objectives for reform include improving risk measurement and management; linking, more precisely, the amount of minimum regulatory capital to the amount of risk taken; further focusing the dialogue between supervisors and a banking organization on the measurement and management of risk and the connection between risk and capital; and increasing market discipline through enhanced transparency.16 Prompt Corrective Action (PCA) As a result of the bank failures in the late 1980s and the rapid depletion of the federal deposit insurance fund, Congress mandated a PCA framework in the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). This act requires federal bank regulators to administer timely corrective action to a bank when its capital position is deemed to have declined below certain threshold levels. The PCA framework specifies mandatory actions that regulators must take if capital ratios fall below certain thresholds, as well as discretionary actions that may be taken.17 Under the PCA statute and accompanying regulations, a bank is assigned to one of five capital categories based primarily on the capital ratios reported in the quarterly FFIEC Call Reports. Four of the five PCA capital categories – “well capitalized,” “adequately capitalized,” “undercapitalized,” and “significantly undercapitalized,” are based on three capital adequacy ratios: the total RBC ratio, the Tier 1 RBC ratio, and the leverage ratio. The most severe capital category, “critically undercapitalized,” is determined by a bank’s

Additional information pertaining to the Basel II Capital Accord may be found on the FRS public website (http://www federalreserve.gov/) and the Bank for International Settlements public website (http://www.bis.org/index htm). 17 The PCA regulations applicable to state member banks are found at the Federal Reserve Board’s Regulation H, Subpart D (12 C.F.R. 208.40 et seq.).

16

19

BOG-- FOIA 10-251 --000226

tangible equity ratio, which measures the equity capital to assets ratios excluding intangible assets from the numerator and the denominator. If a bank is deemed to be “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized” as defined in FDICIA based on its capital ratios, the bank must submit a capital restoration plan that is acceptable to its primary federal regulator, may not make any capital distribution, and may not pay a management fee to anyone that controls the bank. In addition, the bank may not increase its asset size, except under limited conditions, and may not make acquisitions or establish new branches or new lines of business, unless it meets certain conditions. Significantly undercapitalized and critically undercapitalized banks are subject to additional mandatory restrictions. The bank’s primary federal regulator may also impose one or more of the discretionary restrictions enumerated in the statute and regulations through the issuance of a Prompt Corrective Action Directive to any undercapitalized, significantly undercapitalized, or critically undercapitalized bank. A bank may contest the issuance of such a directive through an agency appeal process. Under the PCA statute, a critically undercapitalized bank generally must be placed in conservatorship or receivership within 90 days of becoming critically undercapitalized. In accordance with FDICIA, a BHC must guarantee its subsidiary bank’s capital restoration plan and provide appropriate assurances of performance. Additionally, the cross-guarantee provision of FDICIA requires that, generally, any insured depository institution is liable for losses to the FDIC arising from the default of a commonly controlled insured depository institution. This provision was implemented, in part, to avoid the potential adverse effect of a bank shifting bad assets into a failing affiliate bank and thereby increasing the cost to the FDIC insurance fund. Databases and Information Systems The Federal Reserve Board maintains the National Information Center (NIC), a repository for both bank structure, financial, and confidential supervisory data for all commercial banks and BHCs. Additionally, the Central Document Text Repository (CDTR) is the repository for the electronic versions of commercial bank examination and BHC inspection reports, as well as other confidential supervisory documents. Front-end systems are available to authorized FRS staff for accessing these databases containing both publicly available and confidential supervisory information.

20

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APPROACHES FOR SUPERVISING A FINANCIALLY WEAKENED COMPANY The state insurance regulators and the FRS each have enforcement powers to support their ability to carry out their supervisory responsibilities, and both are subject to laws that require the regulator to take specified corrective action based on RBC thresholds for supervised insurers and supervised state member banks, respectively. State Insurance Departments Regulatory actions of an insurance department include activities that go beyond the monitoring and surveillance activities described above include: Hearings/Conferences – These are sessions in which witnesses are requested to discuss, testify, or otherwise provide information to a state’s insurance department with respect to a specific insurance company or group of companies. Hearings or conferences may be conducted either informally, involving only the department and insurance company personnel, or formally, involving the presence of an appointed hearing officer to conduct the session. Implementation of a Corrective Plan – This involves the execution of a plan of action, reviewed and monitored by a state insurance department, for an insurer to correct a troubled or potentially troubled situation. This may include corrective plans required under RBC requirements. Restrictions on Activities – Such activities may include prohibitions, conditions, or limitations placed by a state insurance department on certain activities or transactions of an insurance company. Examples include requiring pre-approval by the department of specific activities or transactions. The ability to place restrictions on an insurance company depends, in part, on the laws or regulations of the particular jurisdiction. Notice of Impairment – This is a formal regulatory communication from a state insurance department to an insurance company informing the insurance company that the company does not meet stated minimum statutory capital and/or surplus requirements and requiring the company to correct the deficiency by a certain date. Cease and Desist/Suspension Order – This is a formal regulatory communication from a state insurance department ordering an insurance company to stop certain activities, such as the issuance of new insurance policies. Supervision – This is an action taken by a state insurance department under its administrative or legal provisions, under which a supervisor is appointed by an insurance department or by a court to “supervise” the operations of an insurance company. The supervision may be “confidential” (i.e., unannounced or “drawer”), “announced” by the insurance department, or “voluntary” (i.e., assistance was requested or acknowledged by the insurance company).

21

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The Federal Reserve System The FRS employs a range of tools to identify and address a supervised bank or BHC exhibiting emerging problems or weakened financial condition in order to maintain a sound banking system, minimize potential losses to the FDIC insurance fund, and facilitate the institution’s return to financial health, if possible. Routinely, a summary of examiner findings and expected actions is conveyed to the banking organization following each targeted review of a particular business line or business activity, as well as in an examination report that summarizes the key findings of the reviews conducted during the 12- to 18- month examination cycle. For those institutions whose problems warrant additional supervisory action, a range of informal and formal supervisory actions is available, in addition to the PCA measures for banks described above. Informal corrective actions include resolutions adopted by an institution’s board of directors and Memoranda of Understanding between the appropriate Federal Reserve Bank and an institution, whereby the institution’s board agrees to implement the actions that the institution will take to correct deficiencies. Informal actions are not made publicly available by the FRS.18 Formal corrective actions, including Written Agreements and Cease and Desist Orders, are authorized by the Federal Deposit Insurance Act (FDI Act) to correct violations of law and unsafe or unsound practices. These agreements and orders may require a depository institution, a BHC, certain other entities, and any institution-affiliated party, including any director, officer, employee or controlling shareholder to take affirmative action to correct deficiencies or to cease engaging in the violations or other unsafe or unsound practices. Written Agreements and Cease and Desist Orders are made publicly available. They may include measures designed to improve a bank’s capital and asset quality by placing restrictions on dividends, requiring the employment of more qualified management and improved oversight by the bank’s board of directors. Written Agreements and Cease and Desist Orders against BHCs may also include requirements for capital infusions to an undercapitalized FDIC-insured subsidiary bank; restrictions on additional debt, dividends, and inter-corporate transactions; and the termination of certain nonbank activities that constitute violations of law or unsafe or unsound banking practices. In cases where specific violations or practices are likely to cause insolvency, cause dissipation of assets or earnings, weaken the condition of the institution, or prejudice the depositors’ interests, the FRS may issue a Temporary Cease and Desist Order to address these violations or practices. A Temporary Cease and Desist Order requires the banking organization to take or cease specific actions and remains in effect pending the outcome of an administrative hearing on the issues. Temporary Cease and Desist Orders are

The SEC requires publicly traded companies to make public disclosure of certain material information that may affect the securities markets. A publicly traded financial institution, therefore, may be required to disclose the existence of certain informal actions taken by the FRS if the actions are deemed to be material.

18

22

BOG-- FOIA 10-251 --000229

generally not made public by the FRS. In the event that an institution does not consent to supervisory action, the FRS may issue a Notice of Charges to initiate litigation. The FRS is authorized by the FDI Act to suspend or remove institution-affiliated parties who have engaged in a violation of law, an unsafe or unsound practice, or a breach of fiduciary duty, which has caused a bank to suffer a financial loss or other damages or has resulted in a gain to the individual, and that involves personal dishonesty or demonstrates continuing or willful disregard for the safety and soundness of the institution. Notwithstanding these enforcement powers, the GLB Act prohibits the Federal Reserve Board from requiring an insurance company that is a BHC or an insurance company that is a subsidiary of a BHC to provide capital to a depository institution subsidiary of the BHC if the state insurance authority determines, in writing, that such a funds transfer would have a material adverse effect on the financial condition of the insurance company. Additionally, the GLB Act generally prohibits the Federal Reserve Board from taking enforcement action against an insurance company, unless the action is necessary to prevent or redress a practice that poses a material risk to an affiliated depository institution or to the domestic or international payments system, and it is not reasonably possible to protect against the material risk through action directed at the depository institution.19

19

These provisions are codified at 12 U.S.C. 1844(g) and 12 U.S.C. 1848a, respectively.

23

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RECEIVERSHIP AND LIQUIDATION Both state insurance regulators and banking regulators have statutory requirements for receiverships and liquidations of supervised entities. State receivership and liquidation laws vary to some degree. For a state insurance department to be accredited by the NAIC, a state must have laws that substantially conform to the NAIC Model Receivership Act. State Insurance Supervisors Delinquency proceedings are instituted against an insurance company by a state insurance department for the purpose of conserving, rehabilitating, reorganizing, or liquidating the insurance company. Among the various types of delinquency that may be permissible under state law are the following: Conservation — This term has different meanings in different jurisdictions. The scope of conservation efforts can vary from a seizure of certain assets to rehabilitation. Seizure of Assets — A state’s legal or administrative provisions provide for an insurance department to take control of an insurer’s assets, books, records, and business premises if the insurer is domiciled in the state, in order to conserve the company’s assets for the benefit of its policyholders and creditors. Rehabilitation — An insurance company may be placed in a rehabilitation status by an insurance department through a jurisdiction’s legal or administrative proceeding. The rehabilitation process generally involves, sometimes under a court order, the transfer of operational authority from insurance company management to a rehabilitator with the objective of returning the company to a sound financial and operational condition. The court order could, among other matters, direct the rehabilitator to take possession of the assets and administer the assets and the operations of the insurance company under the supervision of the court or under a formal plan approved by the court with notice to the company’s affected creditors. Liquidation — In the event that rehabilitation of an insurer is unsuccessful, the insurance department may, through legal proceedings, place the insurer in liquidation. The liquidation process ordinarily would include the seizure and marshalling of the company’s assets, a determination of the company’s liabilities, and the distribution of the assets of the insurance company under the supervision of the court to address or redeem those liabilities. Dissolution — An insurance department may petition a court for an order to dissolve or terminate the corporate existence of a domestic insurance company following its complete liquidation. The nature, timing, and extent of regulatory action in any given troubled company situation depends, in part, on the applicable jurisdiction’s laws and regulations to which

24

BOG-- FOIA 10-251 --000231

the insurance company is subject, as well as the circumstances of the particular situation. State insurance law may use different terms to refer to essentially similar actions, and the actions that are available to an insurance department differ among the states. When an insurer is found to be insolvent and is ordered liquidated, the guaranty funds are the source of last resort to provide protection for the insurer’s policyholders and claimants. Not all policy obligations, however, are covered. For those that are covered, statutory limits apply. Additionally, not all policyholders and claimants are covered. Bank Supervisors In the event that a commercial bank is formally declared insolvent by its chartering agency (a state banking department or the OCC), the chartering agency and the applicable federal regulator — the FRS, OCC, or the FDIC, in its supervision capacity — generally no longer have any responsibility for supervising the bank. Federal statutes name the FDIC as receiver and outline the process of a bank receivership and liquidation as well as the prioritization of claims. The amount of FDIC insurance coverage of $100,000 per depositor is uniform nationwide in the event of a bank insolvency. Deposits of larger amounts have priority over all other non-depositor creditors. In the event that all of a BHC’s insured depository institutions are placed into receivership, the company is no longer a BHC, and, therefore, is no longer supervised by the FRS. The FRS generally has no role in the liquidation of a BHC or a company that was formerly a BHC. Such liquidations are administered in accordance with federal bankruptcy laws.

25

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CONCLUSION This joint initiative has advanced the insurance and banking regulators’ understanding of each other’s approaches for identifying and supervising financially weakened institutions and enhances coordination between the state insurance departments and the FRS, consistent with the GLB Act mandates for supervision of FHCs. In addition, many other efforts between the FRS and the state insurance supervisors, including the implementation of Memoranda of Understanding now in place between most state insurance departments and the Federal Reserve Board for sharing appropriate confidential, supervisory information and consumer complaints, as envisioned in the GLB Act,20 have fostered effective coordination of supervisory activities. These accomplishments represent significant milestones in the achievement of effective cooperation between banking and insurance regulators.

Other initiatives include the completion of a report mapping risks arising from insurance company activities into the standard FRS bank supervisory risk categories. See the report by the NAIC and the Federal Reserve System Joint Subgroup on Financial Issues, Identification and Mapping of Insurance Risks into the Federal Reserve System’s Defined Banking Risks, dated June 10, 2003.

20

26

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Appendix A Summary of State Regulation for Identifying and Supervising Financially Weakened Insurers Phase1 Trigger Points 1 Regulatory Response Informal2 Used in annual reviews, quarterly reviews and financial condition examination planning. Analysis results may lead to: 1) phone or e-mail inquiry; 2) letter requesting additional information; or 3) face-to-face meeting with management. Formal3 NA

Explanation

Comments The NAIC Accreditation Program provides timelines by which analysis of domestic insurers should be completed by state insurance departments.

Periodic (annual Annual Statements are filed by and quarterly) March 1 of each year. Quarterly financial analysis Statements are filed within 45 of statutory days following each quarter-end. financial The annual statement review statements process tends to be the more comprehensive of the two periodic reviews, because of the amount and depth of information provided by the statement. The analytical tools described in the cells below are utilized throughout the reviews. In addition, the state insurance department analyst also consider other factors/conditions such as a prolonged devaluation in the stock or real estate markets; reinsurance recoveries; deterioration of parent company's public debt rating; and class action lawsuits.

1 2

The term, “phase” in this table is used to refer to possible levels of progression relating to supervisory action as outlined in the NAIC Troubled Company Handbook. Powers confirmed by discretionary authority of a commissioner or department of insurance. 3 Powers permissible by state statute or regulation.

A-1

BOG-- FOIA 10-251 --000234

Phase 1

1

Trigger Points Scoring System

Explanation

Regulatory Response Informal2

Formal3

Comments Ratios and scores are confidential. Ratios address critical areas of an insurer’s operations, such as leverage of capital, growth, underwriting and investment profitability, investment holdings and liquidity. Companies receiving highest scores receive immediate attention, which often leads to a more in-depth analysis. Like the Scoring System, the review process and results of the ATS are confidential. They are used by some states to gauge the financial soundness of non-domestic (foreign) insurers operating within the state.

The NAIC Scoring System Used in annual ratios and scores provide an reviews, quarterly integrated approach to screening reviews and and analyzing the financial examination planning. condition of insurers. Analysis results may lead to: 1) phone or email inquiry; 2) letter requesting additional information; or 3) face-to-face meeting with management. The NAIC ATS is a multi-tiered process through which insurers are assigned levels of priority by a team of state analysts/examiners. The system is based on a series of tests applied to an insurer's financial results, which then assigns a "level" ranking. If an insurer receives a ranking in the top two levels, the company is reviewed by a team member who then validates or changes the assigned level. Used in annual reviews and examination planning. Analysis results may lead to: 1) phone or email inquiry; 2) letter requesting additional information; or 3) face-to-face meeting with management.

1

Analyst Team System (ATS) Review

A-2

BOG-- FOIA 10-251 --000235

Phase 1

1

Trigger Points Financial Condition Examination

Explanation An on-site examination may detect existing or potential financial problems or may be used to investigate problems arising from routine financial analysis.

Regulatory Response Informal2

Formal3

Comments

1

Model Regulation Regarding Hazardous Financial Condition

This model is a Standard in the Standards considered NAIC Accreditation Program. and measured during The purpose of this regulation is analysis process; to set forth standards, which the analysis results may state insurance department may lead to: 1) phone or euse for identifying insurers mail inquiry; 2) letter found to be in an unsound requesting additional financial condition and for information; or 3) authority to initiate action. face-to-face meeting with management.

Required by state law; state Examinations are insurance commissioner has conducted on either a full absolute power to conduct or limited-scope basis. examinations as Full-scope examinations appropriate; insurer must are conducted every 3 - 5 respond to examination years. Limited-scope report comments and examinations may be recommendations. conducted more frequently, depending on circumstances. These standards provide the All accredited states have basis for a court petition to passed laws substantially rehabilitate or liquidate. similar to the NAIC model. A state’s rehabilitation and liquidation act may incorporate by reference its hazardous financial condition law.

1

Reinsurance An insurer's reinsurance Analysis results may May result in limited-scope Credit for reinsurance is Company Failure program is closely monitored by lead to: 1) phone or eexamination. heavily regulated through a state insurance department's mail inquiry; 2) letter statutes, regulations, staff and measured by various requesting additional statutory accounting and financial ratios. A significant information; or 3) reporting rules. These rating downgrade or failure of face-to-face meeting rules are part of the NAIC any reinsurer triggers a reaction with management. Accreditation Program. from department staff to identify affected insurers and to assess potential impact on the insurer's solvency. A-3
BOG-- FOIA 10-251 --000236

Phase 1

1

Trigger Points

Explanation

Regulatory Response Informal2

Formal3

Comments

1

1

All insurers are required to Holding Company Filing register certain information with their domiciliary regulator, if part of a holding company system. Information must be disclosed regarding transactions, relationships and agreements with parent, subsidiary and affiliate (PSA) entities, among other information. Market Conduct All insurers periodically Finding undergo some form of "market conduct" examination. As with financial condition examinations, these may be used to detect or investigate problems that impact existing as well as prospective policyholders. These examinations may also affect the insurer's financial stability. Actuarial All insurers are required to Opinion appoint "qualified actuary," as defined by the NAIC Annual Statement Instructions Property and Casualty (P&C), to provide an opinion on the adequacy of loss and loss adjustment expense reserves, if a P&C insurer; or policy reserves and other actuarially-determined reserves, if a life or health insurer.

Filings are required Analysis results may May result in limited-scope pursuant to NAIC lead to: 1) phone or eexamination. mail inquiry; 2) letter Insurance Holding requesting additional Company System Model Act. All accredited states information; or 3) have passed laws face-to-face meetings substantially similar to the with management. NAIC model. State insurance The NAIC continues to commissioner has absolute work toward developing power to conduct standards of practice for examinations as conducting market conduct appropriate; insurer must examinations. respond to examination report comments and recommendations.

Opinion statements or a change in actuary may lead to: 1) phone or e-mail inquiry; 2) letter requesting additional information; or 3) face-to-face meeting with management.

To the extent possible and appropriate, examiners may utilize the work of the appointed actuary, to validate reserve adequacy.

A-4

BOG-- FOIA 10-251 --000237

Phase 1

1

Trigger Points

Explanation

Regulatory Response Informal2 Report findings or a change in auditor may lead to: 1) phone or email inquiry; 2) letter requesting additional information; or 3) face-to-face meeting with management.

Formal3 Associated with this filing are reporting requirements the independent, external auditor must fulfill if the insurer has materially misstated its financial condition. If internal control deficiencies are reported, the insurer must submit a remediation plan.

Comments To the extent possible and appropriate, examiners may utilize the work of the independent auditor, following some re-testing.

2

Independent All insurers are required to Audit Report obtain an opinion from an (Report on independent auditor on their Significant annual financial statements. In Deficiencies in addition, each insurer must Internal Controls) submit a report prepared by the auditor describing significant deficiencies in the insurer's internal control structure identify during the annual audit. An insurer is also required to report a change in auditor to the insurance department of the state of domicile within five business days of the event. Business or Closer monitoring requires Corrective Plan obtaining the insurer's business plan or corrective plan (including financial projections), depending on the severity of the situation. Two to three year plans are often requested. Financial analyst/examiners utilize these plans to monitor management's execution of the plan and to stimulate dialogue.

A business plan or In some instances, state law Some state insurance corrective action plan explicitly requires the departments are moving to may be required under insurer to file a business or routinely request business general supervisory corrective action plan. For plans and financial authority. example, if an insurer projections from domestic triggers a certain RBC insurers, particularly life action level, a Corrective insurers. Action Plan is required.

A-5

BOG-- FOIA 10-251 --000238

Phase

1

Trigger Points Risk-Based Capital (RBC)

Explanation There are five action levels, which are determined by comparing a company’s Total Adjusted Capital (TAC) to its Authorized Control Level (ACL) RBC as computed by the RBC formula. TAC is compared to ACL RBC because the ACL RBC is the level at which a state insurance commissioner may first take control of an insurer – that is, control of the insurer may be seized. TAC of 150% to 200% of minimum RBC constitutes a company action level under which an insurer must prepare a report to the state regulator outlining the corrective actions the company intends to take. At this level, an insurer must submit a comprehensive financial plan to the regulator that identifies the conditions contributing to the company’s financial condition. This plan must contain proposals to correct the company’s financial problems and provide projections of the company’s financial condition, both with and without the proposed

Regulatory Response Informal2

Formal3 RBC standards and actions are statutory requirements.

Comments The NAIC Risk-Based Capital for Insurers Model Act, or an act substantially similar, is required to attain state insurance department accreditation under the NAIC’s Accreditation Program.

2

RBC Company Action Level

RBC standards and actions are statutory requirements.

A-6

BOG-- FOIA 10-251 --000239

Phase

1

Trigger Points

Explanation corrections. The plan also must list the key assumptions underlying the projections and identify the quality of, and the problems associated with, the insurer’s business. If a company fails to file this comprehensive financial plan, this failure to respond triggers the next action level.

Regulatory Response Informal2

Formal3

Comments

2

RBC Regulatory Action Level

TAC of 100% to 150% of minimum RBC triggers a Regulatory Action Level initiative. At this level, an insurer is also required to file an action plan, and the state insurance commissioner is required to perform any examinations or analyses of the insurer’s business and operations deemed necessary. The state insurance commissioner also issues appropriate corrective orders to address the company’s financial problems.

RBC standards and actions are statutory requirements.

A-7

BOG-- FOIA 10-251 --000240

Phase 3

1

Trigger Points RBC Authorized Control Level

Explanation

Regulatory Response Informal2

Formal3 RBC standards and actions are statutory requirements.

Comments

3

TAC of 70 to 100% of the minimum RBC triggers an Authorized Control Level. This is the first point that the law authorizes the regulator to take control of an insurer. This authorization is in addition to the remedies available at the company and regulatory action levels. It is important to note that the law grants the state insurance commissioner this power. This action level occurs at a point where the insurer may still be technically solvent according to traditional standards – that is, the company’s assets may still be greater than its liabilities. RBC Mandatory TAC of less than 70% triggers a Control Level Mandatory Control Level that requires the regulator to take steps to place an insurer under control. This situation can occur while the insurer still has a positive level of capital and surplus, although a number of the companies that trigger this action level are technically insolvent (liabilities exceed assets).

RBC standards and actions are statutory requirements.

A-8

BOG-- FOIA 10-251 --000241

Phase 3

1

Trigger Points Administrative Supervision

Explanation State insurance commissioner exercises varying levels of control over operations of an insurer, dependent upon the circumstances of the specific case. Ownership of company is not disturbed and directors remain in place. This phase usually involves submission of a corrective plan by the insurer. The state insurance commissioner may appoint an on-site supervisor to monitor performance. State insurance commissioner obtains a court order authorizing 1) seizure of a company; 2) appointment of the state insurance commissioner as receiver; and 3) vesting legal title to all assets of the company in the state insurance commissioner’s name. Management and directors are removed. As receiver, the state insurance commissioner's actions are subject to supervision by the state court that issued the receivership order. State insurance commissioner typically appoints a special deputy receiver to manage the receivership.

Regulatory Response Informal2

Formal3 Statutory requirements relating to administrative supervision vary by state.

Comments

4

Receivership

Statutory requirements Initial seizure order may be relating to receivership vary obtained ex parte in some by state. situations. State insurance commissioner has broad discretion in administering the receivership.

A-9

BOG-- FOIA 10-251 --000242

Phase

1

Trigger Points

Explanation Receiver may attempt to rehabilitate the insurer or, if rehabilitation is not practical, the receiver will liquidate the company.

Regulatory Response Informal2

Formal3

Comments

A-10

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A-11

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Appendix B
Summary of Federal Reserve System Framework for Identifying and Supervising Financially Weakened State Member Banks and Bank Holding Companies This table highlights key elements of the FRS’s supervisory framework pertaining to bank holding companies (BHCs) and state member banks. It does not purport to include all events that may trigger a supervisory response or the full range of applicable supervisory actions. Event That May Trigger Supervisory Response
1) Quarterly surveillance results for state member banks

Applicable Regulation/ Policy or Guidance1
SR letter 00-7: System Bank Watch List Program

Supervisory Action and Time Frames for Action if Applicable
Reserve Bank staff investigates potential financial weaknesses and prepares or updates analyses for watch list banks identified through the FRS’s quarterly surveillance process. The analyses address the sources of potential weakness and their potential effect on safety and soundness; assess the appropriateness of current supervisory ratings and on-site examination schedules; and detail future supervisory plans. Reserve Bank staff prepares or updates analyses for BHCs with assets of $1 billion or more identified by quarterly exception screens. The Reserve Bank analyses detail the sources of potential weakness, their effect on safety and soundness, and supervisory actions in response to surveillance screen results. For BHCs under $1 billion, (except small, non-complex BHCs), quarterly surveillance screens are also used to identify potentially significant changes in the conditions of these companies between on-site supervisory reviews.

2) Quarterly surveillance results for BHCs

SR letter 95-43: Revised Bank Holding Company Surveillance Procedures SR letter 02-01: Revisions to BHC Supervision Procedures for Organizations with Total Consolidated Assets of $5 Billion or Less (Contains separate guidance for both BHCs $1 - $5 billion, and BHCs less than $1 billion in assets.)

SR letters, the Commercial Bank Examination Manual, and the Bank Holding Company Inspection Manual provide guidance to Federal Reserve Banks for implementing their Federal Reserve Board-delegated responsibility for the supervision of banking organizations. SR letters are issued by Federal Reserve Board staff to the officers in charge of supervision at each Reserve Bank. These documents are accessible on the Federal Reserve Board’s website at www federalreserve.gov.

1

B-1

BOG-- FOIA 10-251 --000245

Event That May Trigger Supervisory Response
3) Risk assessments of BHCs, including FHCs, and banks are prepared by Federal Reserve Bank staff. Risk assessments include an analysis of the level of risk, the direction of risk, and management controls. The following risks are assessed for the consolidated organization, as well as for the major business lines: operational risk, credit risk, market risk, liquidity risk, legal risk, reputational risk, and overall risk. For FHCs, particular focus is on understanding intra-group exposures and risk concentrations across all business lines.

Applicable Regulation/ Policy or Guidance1
SR letter 97-24: Risk-Focused Framework for the Supervision of Large Complex Institutions SR letter 97-25: Risk-Focused Framework for the Supervision of Community Banks SR letter 99-15: Risk-Focused Supervision of Large Complex Banking Organizations SR letter 02-01: Revisions to BHC Supervision Procedures for Organizations with Total Consolidated Assets of $5 Billion or Less SR letter 00-15: Risk-Focused Supervision Policy for Small Shell BHCs SR letter 00-13: Framework for Financial Holding Company Supervision FRS’s role to maintain stability of the banking system as well as role of prudential regulator for banking institutions. Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) requires full-scope on-site examinations of state member banks are required at least once during each 12-month period with the exception that certain small institutions can be examined once during each 18-month period. The frequency of BHC inspections is dependent on the size, condition, and complexity of the institution.

Supervisory Action and Time Frames for Action if Applicable
Based on the risk assessment, supervisory staff determines the scope, objectives and dates for targeted on-site reviews of selected risk areas. Supervisory staff coordinates with functional and primary regulators when appropriate.

4) Significant market, economic or other external event affecting banking industry condition 5) Bank examinations and BHC inspections

Conduct monitoring and targeted reviews of banking organizations, as appropriate, and develop action plans. Institutions are required to respond to issues identified. A range of informal and formal supervisory actions that may be appropriate to address weaknesses identified include but are not limited to: • Written Agreement, • Cease and Desist Order, • Temporary Cease and Desist Order, and • Prompt Corrective Action (PCA) (see below portion of this chart regarding PCA).

B-2

BOG-- FOIA 10-251 --000246

Event That May Trigger Supervisory Response
6) FHCs whose depository institution subsidiaries become less than well capitalized or are not well managed

Applicable Regulation/ Policy or Guidance1
Formal corrective action is required under section 4(m) of the BHC Act

Supervisory Action and Time Frames for Action if Applicable
• Requires an agreement between the FHC and the FRS within 45 days of notification of deficiency. • Institution must submit a plan for corrective action. • Institution must correct deficiency within 180 days; FRS may extend the deadline based on reasonable cause.

7) Capital deterioration Bank capital deterioration: Well capitalized Adequately capitalized Undercapitalized

FDICIA PCA provisions apply to bank capital levels. These provisions do not apply to BHC capital levels. FDICIA PCA provisions apply to bank capital levels. These provisions do not apply to BHC capital levels. No action required No action required Increase monitoring. The following conditions apply: • Capital restoration plan is required; • Parent BHC must guaranty bank’s capital plan; • Cessation of dividends; and • Limitation on management fees paid to controlling persons. Conditions (see above) for “Undercapitalized” banks apply. Mandatory and discretionary restrictions include: • Sale of shares to increase capital; • Sale or merger of bank; • Restrictions on transactions with affiliates; • Restrictions on interest rates; and • Restrictions on senior officer compensation. Conditions (see above) for “Undercapitalized” and “Significantly Undercapitalized” banks apply. The Federal Deposit Insurance Corporation (FDIC) may be appointed receiver within 90 days.

Significantly undercapitalized

FDICIA PCA provisions apply to bank capital levels. These provisions do not apply to BHC capital levels.

Critically undercapitalized

FDICIA PCA provisions apply to bank capital levels. These provisions do not apply to BHC capital levels.

B-3

BOG-- FOIA 10-251 --000247

Event That May Trigger Supervisory Response
BHC capital deterioration

Applicable Regulation/ Policy or Guidance1
BHC Act

Supervisory Action and Time Frames for Action if Applicable
BHC capital deterioration may trigger informal or formal action such a Memorandum of Understanding, Written Agreement, or Cease and Desist Order. FDIC is generally appointed receiver.

8) Bank & BHC insolvency • Bank insolvency or other factors identified by the chartering agency (state banking department or OCC) that are likely to result in losses to the federal deposit insurance fund • BHC insolvencies

Federal Deposit Insurance Act

N/A: BHC insolvencies fall under federal bankruptcy laws.

N/A

B-4

BOG-- FOIA 10-251 --000248

From: To: Subject: Date: Attachments:

William R Nelson Michael S Gibson Re: derivatives 09/14/2008 04:51 AM aig-derivatives.doc

sorry I overlooked this and didn't put this in the memo I circulated yesterday evening. It's good stuff. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To

09/13/2008 01:57 PM

Jon D Greenlee/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Christopher Calabia/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Roberto Perli/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD derivatives

cc Subject

I've written up a page on derivatives with the limited information I have. If anyone can fill in any details, please do so. Mike

BOG-- FOIA 10-251 --000249

(b) (5)

BOG-- FOIA 10-251 --000250

(b) (5)

BOG-- FOIA 10-251 --000251

From: To: Cc: Subject: Date: Attachments:

Brian F Madigan Michael S Gibson James A Clouse; Jon D Greenlee; Michael S Gibson; Roberto Perli; William B English Re: Partial memo draft 09/14/2008 05:00 AM AIG memo v2.mg.bfm.doc

I added a few comments to Mike's.

▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To

William B English/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD

09/13/2008 09:27 PM

cc Subject Re: Partial memo draft

Bill, I added some details, especially on the derivatives stuff. Mike [attachment "AIG memo v2.mg.doc" deleted by Brian F Madigan/BOARD/FRS] ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD Partial memo draft

09/13/2008 05:32 PM

Duplicate

BOG-- FOIA 10-251 --000252

(b) (5)

BOG-- FOIA 10-251 --000253

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BOG-- FOIA 10-251 --000254

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BOG-- FOIA 10-251 --000259

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BOG-- FOIA 10-251 --000260

From: To: Cc: Subject: Date:

Jon D Greenlee Brian F Madigan James A Clouse; Michael S Gibson; Roberto Perli; William B English Re: Partial memo draft 09/14/2008 07:32 AM

(b) (5)

Thanks Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To cc

Michael S Gibson/BOARD/FRS@BOARD James A Clouse/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Re: Partial memo draft

09/14/2008 05:00 AM

Subject

Duplicate

BOG-- FOIA 10-251 --000261

From: To: Subject: Date: Attachments:

Adam Ashcraft Michael S Gibson Fw: AIG and the discount window 09/14/2008 08:10 AM aig 20080914.doc ML-S&P on AIG.pdf Citi-AIG new stock price 9-2008.pdf

Adam B. Ashcraft Financial Intermediation Function Federal Reserve Bank of New York (212) 720-1617 phone (212) 720-8363 fax (646) 206-6175 cell ----------------------------------------------------------------------------------------------------The contents of this e-mail reflect the opinion of the author and not the opinion of the Federal Reserve Bank of New York or the Federal Reserve System.
----- Forwarded by Adam Ashcraft/NY/FRS on 09/14/2008 08:10 AM ----Adam Ashcraft/NY/FRS

To

09/14/2008 08:13 AM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, Beverly Hirtle/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Chris Burke/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jamie McAndrews/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Meg McConnell/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Til Schuermann/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, Warren Hrung/NY/FRS@FRS AIG and the discount window

cc Subject

Short comment on the AIG situation, with references attached. One if the Merril note Warren circulated yesterday.
(b) (5)

BOG-- FOIA 10-251 --000262

Adam B. Ashcraft Financial Intermediation Function Federal Reserve Bank of New York (212) 720-1617 phone (212) 720-8363 fax (646) 206-6175 cell ----------------------------------------------------------------------------------------------------The contents of this e-mail reflect the opinion of the author and not the opinion of the Federal Reserve Bank of New York or the Federal Reserve System.

BOG-- FOIA 10-251 --000263

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BOG-- FOIA 10-251 --000264

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BOG-- FOIA 10-251 --000280

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BOG-- FOIA 10-251 --000281

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BOG-- FOIA 10-251 --000283

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BOG-- FOIA 10-251 --000285

From: To: Cc: Subject: Date:

Brian F Madigan Jon D Greenlee James A Clouse; Michael S Gibson; Roberto Perli; William B English Re: Partial memo draft 09/14/2008 08:18 AM

Colleagues, We need very quickly to draft the section on solvency. It does not need to be long or detailed, but needs to get across the most recent reported figures and our basic (b) (5) judgment about the firm's solvency.
b

Thanks, Brian

▼ Jon D Greenlee/BOARD/FRS
Jon D Greenlee/BOARD/FRS

To cc

Brian F Madigan/BOARD/FRS@BOARD James A Clouse/BOARD/FRS@Board, Michael S Gibson/BOARD/FRS@Board, Roberto Perli/BOARD/FRS@Board, William B English/BOARD/FRS@Board Re: Partial memo draft

09/14/2008 07:32 AM Subject

Duplicate

BOG-- FOIA 10-251 --000286

From: To: Subject: Date:

William R Nelson James A Clouse; Roberto Perli; Brian F Madigan; William B English press coverage of AIG's efforts to sell assets 09/14/2008 09:15 AM

AIG plans $20 billion asset sell-off - paper 14 Sep, 2008, 1729 hrs IST, REUTERS

LONDON: American International Group, the world's biggest insurer, is planning a $20 billion asset sell-off as it fights to correct a slump in its shares and braces for the impact of Hurricane Ike, a London based newspaper said. The newspaper, without citing sources, said details of the plan could come as early as Monday. It said assets under the hammer included Transatlantic Holdings, AIG's New York-listed reinsurance group, and that Europe's Swiss Re and Munich Re were potential buyers. AIG and Swiss Re could not immediately be reached for comment. Munich Re declined to comment. A source familiar with developments said that AIG could announce details of its turnaround plan much sooner than expected, including possible asset sales and how it will shore up capital. Media reports on Friday said that AIG could hold an investor call as early as Monday, and that the insurer had hired JPMorgan to advise it on raising fresh capital. AIG has been hit hard by the global credit crunch and its shares plunged as much as 34.5 per cent on Friday, stepping up the pressure for quick action. A portfolio of credit default swaps AIG wrote to guarantee securities linked to subprime mortgages has triggered cumulative losses of $18 billion over the past 3 quarters.

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
wnelson@frb.gov

----- Forwarded by William R Nelson/BOARD/FRS on 09/14/2008 09:12 AM -----

To 09/14/2008 09:11 AM cc Subject

wnelson@frb.gov ~Possible Untrusted Sender~ Economic Times
BOG-- FOIA 10-251 --000287

Dear wnelson@frb.gov, wnelson@frb.gov believes you should read this article from Economic Times.com. Please click on the link below to go to the page. If you think someone you know would like to read it too, do mail it to them. Check This Out!!! Log on to : http://www.economictimes.indiatimes.com Best regards, Team Indiatimes The Economic Times

BOG-- FOIA 10-251 --000288

From: To:

Cc: Subject: Date:

Patricia Mosser Alejandro LaTorre; Richard Charlton; Tobias Adrian; jim.mahoney@ny.frb.org; Catherine Voigts; Adam Ashcraft; Michael Schetzel; Christopher Calabia; Brian F Madigan; Deborah P Bailey; Scott Alvarez; Jon D Greenlee; Michael S Gibson; christine.cumming@ny.frb.org; Terrence Checki; Elise Liebers Carol Grunwald Conference Call re AIG w/ NYS Dept of Ins at 10:30 09/14/2008 10:01 AM

Details below. Please invite appropriate folks from your area. Main topic of discussin will be NYSID's view of financial health of the insurance subs. We will not be talking about derivatives book.
(b) (5)

----- Forwarded by Patricia Mosser/NY/FRS on 09/14/2008 09:54 AM ----KWall@ins.state.ny.us To 09/14/2008 09:49 AM cc Subject Call w/ NYS Dept of Ins patricia.mosser@ny.frb.org

Dial-in: 888 296 6500 Passcode: 7342442 Time; 10;30 am Please share with your colleages. If you have any difficulty or any questions, feel free to contact me at 917 577 0440.

Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000289

From: To: Subject: Date:

Coryann Stefansson Steven M Durfey Re: Previous email 09/14/2008 10:08 AM

I have been paang the stuff on to them also... Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # 202 294 9829 ▼ Steven M Durfey ----- Original Message ----From: Steven M Durfey Sent: 09/14/2008 09:01 AM CDT To: Coryann Stefansson Subject: Re: Previous email

Good (?) morning - I used to look forward to weekends? Anyway, I think you have something from Joe on Leh that Ray shared with Diane/Cahill, and we are still pulling together stuff for AIG. Tks, Durf Steven M Durfey Large Bank Division Telephone 312-322-6844 Mobile 312-953-6824 Fax 312-322-5833

▼ Coryann Stefansson/BOARD/FRS@BOARD
Coryann Stefansson/BOARD/FRS@BOARD

To

09/13/2008 12:08 PM

Suzanna Costello/ATL/FRS@FRS, James Barnes/RICH/FRS@FRS, Steven M Durfey/BSR/CHI/FRS@FRS, Ron.Feldman@mpls.frb.org, Nadine.M.Wallman@clev.frb.org, Suzanne Killian/BOARD/FRS@BOARD, Phyllis L Harwell/BOARD/FRS@BOARD, William Charwat/BOARD/FRS, Chris Haley/BOS/FRS@FRS, Kim Jensik/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS, Jerrold L Newlon/CLEV - BSR12/CLEV/FRS@FRS Previous email

cc Subject

At this point, I need you not to go to your banks regarding AIG or Lehman but rather to go to you internal MIS to determine the impact of a bankruptcy of Lehman or AIG to your organization.....
BOG-- FOIA 10-251 --000290

thanks Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555

BOG-- FOIA 10-251 --000291

From: To: Subject: Date: Attachments:

Michael.S.Gibson@frb.gov Adam.Ashcraft@ny.frb.org Re: Fw: AIG and the discount window 09/14/2008 10:19 AM aig 20080914.doc ML-S&P on AIG.pdf Citi-AIG new stock price 9-2008.pdf

Adam,

(b) (5)

Mike

Adam Ashcraft/NY/FRS@F RS Michael S Gibson/BOARD/FRS@BOARD 09/14/2008 08:10 AM Subject Fw: AIG and the discount window

To cc

Adam B. Ashcraft Financial Intermediation Function Federal Reserve Bank of New York (212) 720-1617 phone (212) 720-8363 fax (646) 206-6175 cell ---------------------------------------------------------------------------------------------------The contents of this e-mail reflect the opinion of the author and not the opinion of the Federal Reserve Bank of New York or the Federal Reserve System. ----- Forwarded by Adam Ashcraft/NY/FRS on 09/14/2008 08:10 AM ----Adam Ashcraft/NY/FRS To 09/14/2008 08:13 AM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, Beverly

BOG-- FOIA 10-251 --000292

Hirtle/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Chris Burke/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jamie McAndrews/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Meg McConnell/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Til Schuermann/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, Warren Hrung/NY/FRS@FRS cc Subject AIG and the discount window

Duplicate

BOG-- FOIA 10-251 --000293

Meeting Invitation:
Calendar Entry Subject: When Date: Time: Chair: Invitees Required (to): Fw: Call w/ NYS Dept of Ins / Dial-in: 888 296 6500 / Passcode: 7342442 Sunday 09/14/2008 10:30 AM - 11:00 AM (0 hours 30 minutes) Carol Grunwald Adam Ashcraft/NY/FRS@FRS; Alejandro LaTorre/NY/FRS@FRS@NY; Brian F Madigan/BOARD/FRS@BOARD; Catherine Voigts/NY/FRS@FRS; Christine Cumming/NY/FRS@FRS; Christopher Calabia/NY/FRS@FRS; Deborah P Bailey/BOARD/FRS@BOARD; Jim Mahoney/NY/FRS@FRS; Jon D Greenlee/BOARD/FRS@BOARD; Michael S Gibson/BOARD/FRS@BOARD; Michael Schetzel/NY/FRS@FRS; Patricia Mosser/NY/FRS@FRS; Richard Charlton/NY/FRS@FRS; Scott Alvarez/BOARD/FRS@BOARD; Terrence Checki/NY/FRS@FRS; Tobias Adrian/NY/FRS@FRS; William Rutledge/NY/FRS@FRS@NY

Optional (cc): Where Location:

M9 MKT Library/NY Main Building@FRS

Details below. Please invite appropriate folks from your area. Main topic of discussin will be NYSID's view of financial health of the insurance subs. We will not be talking about derivatives book.
(b) (5)

----- Forwarded by Patricia Mosser/NY/FRS on 09/14/2008 09:54 AM ----KWall@ins.state.ny.us To 09/14/2008 09:49 AM cc Subject Call w/ NYS Dept of Ins patricia.mosser@ny.frb.org

Dial-in: 888 296 6500 Passcode: 7342442 Time; 10;30 am Please share with your colleages. If you have any difficulty or any questions, feel free to contact me at 917 577 0440.

BOG-- FOIA 10-251 --000294

Sent from my BlackBerry Wireless Handheld

----- Forwarded by Patricia Mosser/NY/FRS on 09/14/2008 10:06 AM ----KWall@ins.state.ny.us To 09/14/2008 09:49 AM cc Subject Call w/ NYS Dept of Ins patricia.mosser@ny.frb.org

Dial-in: 888 296 6500 Passcode: 7342442 Time; 10;30 am Please share with your colleages. If you have any difficulty or any questions, feel free to contact me at 917 577 0440.

Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000295

From: To: Cc:

Subject: Date:

Christopher Calabia Patricia Mosser Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts; christine.cumming@ny.frb.org; Deborah P Bailey; jim.mahoney@ny.frb.org; Jon D Greenlee; Michael S Gibson; Michael Schetzel; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge Re: Fw: Call w/ NYS Dept of Ins at 8:30 re AIG 09/14/2008 10:25 AM

Chris Calabia & Elise Liebers will lead the discussion of item #2; other supervisors may ask follow-ups. ▼ Patricia Mosser/NY/FRS
Patricia Mosser/NY/FRS

To

09/14/2008 10:11 AM

Alejandro LaTorre/NY/FRS@FRS@NY, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, jim.mahoney@ny.frb.org, Catherine Voigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS, Michael Schetzel/NY/FRS, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD, Christopher Calabia/NY/FRS, christine.cumming@ny.frb.org, Terrence Checki/NY/FRS, Jon D Greenlee/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, William Rutledge/NY/FRS@FRS@NY Carol Grunwald/NY/FRS Fw: Call w/ NYS Dept of Ins at 8:30 re AIG

cc Subject

Duplicate

BOG-- FOIA 10-251 --000296

From: To: Cc:

Subject: Date:

Christopher Calabia Patricia Mosser Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts; christine.cumming@ny.frb.org; Deborah P Bailey; jim.mahoney@ny.frb.org; Jon D Greenlee; Michael S Gibson; Michael Schetzel; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge URGENT -- call delayed by 5 minutes 09/14/2008 10:29 AM

We've been asked to call in at 10:35 -- the insurance department is still on the line on another call. We'll call in again in 5 minutes! ▼ Patricia Mosser/NY/FRS
Patricia Mosser/NY/FRS

To

09/14/2008 10:11 AM

Alejandro LaTorre/NY/FRS@FRS@NY, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, jim.mahoney@ny.frb.org, Catherine Voigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS, Michael Schetzel/NY/FRS, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD, Christopher Calabia/NY/FRS, christine.cumming@ny.frb.org, Terrence Checki/NY/FRS, Jon D Greenlee/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, William Rutledge/NY/FRS@FRS@NY Carol Grunwald/NY/FRS Fw: Call w/ NYS Dept of Ins at 8:30 re AIG

cc Subject

Duplicate

BOG-- FOIA 10-251 --000297

From: To: Subject: Date:

William R Nelson Patricia Mosser Get on the aig call now 09/14/2008 10:31 AM

Email: william.r.nelson@frb.gov Office: 202-452-3579 Mobile: 202-725-3612

BOG-- FOIA 10-251 --000298

From: To: Cc:

Subject: Date:

Jon D Greenlee Christopher Calabia Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts; christine.cumming@ny.frb.org; Deborah P Bailey; jim.mahoney@ny.frb.org; Michael S Gibson; Michael Schetzel; Patricia Mosser; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge Re: URGENT -- call delayed by 5 minutes 09/14/2008 10:31 AM

They are on now and ready to go. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Christopher Calabia/NY/FRS@FRS
Christopher Calabia/NY/FRS@FRS

To cc

Patricia Mosser/NY/FRS@FRS Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@BOARD, Carol Grunwald/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, christine.cumming@ny.frb.org, Deborah P Bailey/BOARD/FRS@BOARD, jim.mahoney@ny.frb.org, Jon D Greenlee/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Michael Schetzel/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Scott Alvarez/BOARD/FRS@BOARD, Terrence Checki/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Rutledge/NY/FRS@FRS URGENT -- call delayed by 5 minutes

09/14/2008 10:29 AM

Subject

Duplicate

Duplicate

BOG-- FOIA 10-251 --000299

From: To: Subject: Date:

Adam Ashcraft Michael S Gibson Re: Fw: AIG and the discount window 09/14/2008 10:33 AM

Good suggestion I don't know how much can be done today but will try to take a look
(b) (5)

-------------------------Sent from my BlackBerry Wireless Handheld ▼ Michael S Gibson ----- Original Message ----From: Michael S Gibson Sent: 09/14/2008 10:19 AM EDT To: Adam Ashcraft Subject: Re: Fw: AIG and the discount window

Adam,

Duplicate

BOG-- FOIA 10-251 --000300

From: To: Cc:

Subject: Date:

Christopher Calabia Jon D Greenlee Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts; christine.cumming@ny.frb.org; Deborah P Bailey; jim.mahoney@ny.frb.org; Michael S Gibson; Michael Schetzel; Patricia Mosser; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge Re: URGENT -- call delayed by 5 minutes 09/14/2008 10:35 AM

thanks, we are back on. ▼ Jon D Greenlee/BOARD/FRS@BOARD
Jon D Greenlee/BOARD/FRS@BOARD

To cc

Christopher Calabia/NY/FRS@FRS Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian F Madigan/BOARD/FRS@Board, Carol Grunwald/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, christine.cumming@ny.frb.org, Deborah P Bailey/BOARD/FRS@Board, jim.mahoney@ny.frb.org, Michael S Gibson/BOARD/FRS@Board, Michael Schetzel/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Scott Alvarez/BOARD/FRS@Board, Terrence Checki/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Rutledge/NY/FRS@FRS Re: URGENT -- call delayed by 5 minutes

09/14/2008 10:35 AM

Subject

They are on now and ready to go. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Christopher Calabia/NY/FRS@FRS
Duplicate

BOG-- FOIA 10-251 --000301

From: To: Subject: Date:

Michael.S.Gibson@frb.gov William.R.Nelson@frb.gov; Roberto.Perli@frb.gov paragraphs 09/14/2008 11:42 AM

(b) (5)

BOG-- FOIA 10-251 --000302

From: To: Cc: Subject: Date:

Alejandro LaTorre Patricia Mosser Christopher Calabia; William R Nelson Re: questions on call 09/14/2008 12:24 PM

(b) (5)

▼ Patricia Mosser/NY/FRS
Patricia Mosser/NY/FRS

To cc

William R Nelson/BOARD/FRS@BOARD Christopher Calabia/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS@NY Re: questions on call

09/14/2008 11:51 AM

Subject

(b) (5)

Alex is going to contact the Treasurer this morning to get clarity on the plan..... ▼ William R Nelson/BOARD/FRS@BOARD
William R Nelson/BOARD/FRS@BOARD

To cc Subject

Patricia Mosser/NY/FRS@FRS Christopher Calabia/NY/FRS@FRS questions on call

09/14/2008 11:43 AM

(b) (5)

thanks Bill
BOG-- FOIA 10-251 --000303

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000304

From: To: Subject: Date: Attachments:

William R Nelson William B English aig memo 09/14/2008 01:23 PM AIG memo v3.doc

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000305

(b) (5)

BOG-- FOIA 10-251 --000306

(b) (5)

BOG-- FOIA 10-251 --000307

(b) (5)

BOG-- FOIA 10-251 --000308

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BOG-- FOIA 10-251 --000309

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BOG-- FOIA 10-251 --000310

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BOG-- FOIA 10-251 --000311

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BOG-- FOIA 10-251 --000312

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BOG-- FOIA 10-251 --000313

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From: To: Subject: Date:

Deborah P Bailey Norah Barger; Roger.Cole@frb.gov Fw: Anything on AIG 09/14/2008 01:57 PM

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/14/2008 01:57 PM ----Jon D Greenlee/BOARD/FRS

To cc Subject

Deborah P Bailey/BOARD/FRS@BOARD

09/14/2008 01:39 PM

Re: Anything on AIG

We had a call with NY State Insurance Department this morning. It sounded a bit more promising than yesterday and (b)(5)&(b)(8) with the Lehman situation compared

(b)(5)&(b)(8)

Diane Fraser is typing up a more complete version of the call. Jon

BOG-- FOIA 10-251 --000318

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Deborah P Bailey/BOARD/FRS
Deborah P Bailey/BOARD/FRS

To cc Subject

Jon D Greenlee/BOARD/FRS Anything on AIG

09/14/2008 01:16 PM

-------------------------Sent from the Blackberry of Deborah Bailey

BOG-- FOIA 10-251 --000319

From: To: Subject: Date: Attachments:

William R Nelson Michael S Gibson; Roberto Perli aig memo 09/14/2008 02:03 PM AIG memo v3.doc

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000320

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From: To: Subject: Date: Attachments:

William R Nelson Jon D Greenlee aig memo 09/14/2008 02:06 PM AIG memo v3.doc

Jon, here is the current draft of the memo for your comments. If you can't comment till later, check with my for a fresh draft. thanks Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
Attachment is a duplicate

BOG-- FOIA 10-251 --000332

From: To: Subject: Date: Attachments:

William R Nelson Jon D Greenlee Fw: aig memo 09/14/2008 02:26 PM AIG memo v3.doc

you might want to hold off commenting on this. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
William R Nelson/BOARD/FRS

----- Forwarded by William R Nelson/BOARD/FRS on 09/14/2008 02:26 PM -----

To cc Subject

Jon D Greenlee/BOARD/FRS@BOARD aig memo

09/14/2008 02:06 PM

Duplicate

BOG-- FOIA 10-251 --000333

From: To: Subject: Date:

William R Nelson Jon D Greenlee Re: Fw: aig memo 09/14/2008 02:28 PM

Brian M. thinks it is unlikely it will go to the Board. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Jon D Greenlee/BOARD/FRS
Jon D Greenlee/BOARD/FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD

09/14/2008 02:27 PM

Re: Fw: aig memo

okay - I was making some edits Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Jon D Greenlee/BOARD/FRS@BOARD Fw: aig memo

09/14/2008 02:26 PM

Duplicate

BOG-- FOIA 10-251 --000334

From: To: Cc: Subject: Date: Attachments:

Michael S Gibson William R Nelson Roberto Perli; William B English Re: aig memo 09/14/2008 02:43 PM AIG memo v3.mg.doc

My comments...

▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD aig memo

09/14/2008 02:03 PM

[attachment "AIG memo v3.doc" deleted by Michael S Gibson/BOARD/FRS] Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000335

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From: To: Cc: Subject: Date: Attachments:

Roberto Perli William R Nelson Michael S Gibson; William B English Re: aig memo 09/14/2008 02:52 PM AIG memo v3.perli.doc

A few comments.

▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD aig memo

09/14/2008 02:03 PM

[attachment "AIG memo v3.doc" deleted by Roberto Perli/BOARD/FRS] Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000347

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BOG-- FOIA 10-251 --000358

From: To: Subject: Date: Attachments:

William R Nelson Roberto Perli Re: aig memo 09/14/2008 02:53 PM AIG memo v3.perli.doc

thanks. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Roberto Perli/BOARD/FRS
Roberto Perli/BOARD/FRS

To cc

William R Nelson/BOARD/FRS@BOARD Michael S Gibson/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Re: aig memo

09/14/2008 02:52 PM

Subject

Duplicate

BOG-- FOIA 10-251 --000359

F om To Cc Subject Date Attachments

Diane

ase @f b gov l f Diane ase @f b gov Re My p opo ed nse t to Moneta y Affai s pa ial memo d aft 09/14/2008 03 02 M AIG memo v2 mg bfm - D d ts 9-14-08 doc

. . .plus some cosmetic ni s I ed ted. Jon, wou d you please let me know of your comments. Thanks, D ane

Jon D Greenlee BOARD FRS 09 4 2008 07 33 AM

o cc Sub ect

Diane ase BOARD RS@BOARD

w

a t al memo d a t

See my note be ow - can you work up a paragraph? I ll send the memo separa ely. Jon Green ee Assoc ate Direc or Board of Governors of the Federal Reserve System Phone (202) 52-2962
Jon D Green ee BOARD FRS 09 4 2008 07 32 AM o cc B an Madigan BOARD RS@BOARD ames A C ouse BOARD RS@Boa d Michael S Gibson BOARD RS@Boa d Robe to e i BOARD RS@Boa d Wi l am B Engl sh BOARD RS@Boa d Subject Re a ial memo d a t L

---- o wa ded by on D G een ee BOARD RS on 09 4 2008 07 32 AM - ---

nk

(b) (5)
Thanks Jon Jon Green ee Assoc ate Direc or Board of Governors of the Federal Reserve System Phone (202) 52-2962

Br an F Madigan BOARD FRS o 09 4 2008 05 00 AM cc M chael S G bson BOARD RS@BOARD ames A C ouse BOARD RS@BOARD on D G een ee BOARD RS@BOARD M chael S G bson BOARD RS@BOARD Robe o e li BOARD RS@BOARD W l iam B Eng ish BOARD RS@BOARD Sub ect Re a t al memo d a

Link

I added a few comments to Mike s. [attachment AIG memo v2.mg.bfm doc de eted by Jon D Greenlee/BOARD FRS]

Michael S Gibson Board FRS Sent by Michael S G bson BOARD RS 09 3 2008 09 27 M

o

W l iam B Eng ish BOARD RS@BOARD M chael S G bson BOARD RS@BOARD B ian Madigan BOARD RS@BOARD ames A C ouse BOARD RS@BOARD on D G een ee BOARD RS@BOARD Robe o e li BOARD RS@BOARD

cc Sub ect Re a t al memo d a

Link

B ll, I added some deta ls, especia ly on the derivatives stuff. Mike [attachment AIG memo v2.mg.doc de eted by Brian F Madigan/BOARD/FRS]

Wil iam B English BOARD FRS 09 3 2008 05 32 M o cc Subject a t al memo d a t Michael S Gibson BOARD RS@BOARD

A tached is a rough dra t of the first part of our memo. I was not sure where to s op, so I put in some discuss on of the current problems (which may over ap w th Jon's discussion of iquid ty in the second section) and of the possible spil overs (which may over ap w th the Ne son/Clouse discussion of the pros and cons of lending).

Comments very welcome, B ll E.

(b) (5)

[attachment AIG memo v2.doc de eted by Michael S Gibson BOARD/FRS] [attachment Binder1.pdf deleted by Michael S Gibson/BOARD/FRS]

- AIG memo 2 mg fm - DF edits 9-14-08 doc

BOG-- FOIA 10-251 --000360

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BOG-- FOIA 10-251 --000368

From: To: Subject: Date:

Jon D Greenlee Diane Fraser Re: My proposed insert to Monetary Affairs partial memo draft 09/14/2008 03:04 PM

Thanks - i just heard from Bill Nelson that they are going to hold off on the memo for right now. Good you did this just in case. Again, thanks for everything you've done on your weekend. Jon -------------------------Sent from my BlackBerry Wireless Handheld ▼ Diane Fraser ----- Original Message ----From: Diane Fraser Sent: 09/14/2008 03:02 PM EDT To: Jon Greenlee Cc: Diane Fraser Subject: Re: My proposed insert to Monetary Affairs partial memo draft

. . .plus some cosmetic nits I edited.

Jon, would you please let me know of your comments. [attachment "AIG memo v2.mg.bfm - DF edits 9-14-08.doc" deleted by Jon D Greenlee/BOARD/FRS] Thanks, Diane

▼ Jon D Greenlee/BOARD/FRS
Jon D Greenlee/BOARD/FRS

To cc Subject

Diane Fraser/BOARD/FRS@BOARD Fw: Partial memo draft

09/14/2008 07:33 AM

See my note below - can you work up a paragraph? I'll send the memo separately. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/14/2008 07:32 AM -----

BOG-- FOIA 10-251 --000369

Jon D Greenlee/BOARD/FRS

To cc

Brian F Madigan/BOARD/FRS@BOARD James A Clouse/BOARD/FRS@Board, Michael S Gibson/BOARD/FRS@Board, Roberto Perli/BOARD/FRS@Board, William B English/BOARD/FRS@Board Re: Partial memo draft

09/14/2008 07:32 AM Subject

(b) (5)

Thanks Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To cc

Michael S Gibson/BOARD/FRS@BOARD James A Clouse/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Re: Partial memo draft

09/14/2008 05:00 AM

Subject

I added a few comments to Mike's. [attachment "AIG memo v2.mg.bfm.doc" deleted by Jon D Greenlee/BOARD/FRS]

BOG-- FOIA 10-251 --000370

▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To

William B English/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD

09/13/2008 09:27 PM

cc Subject Re: Partial memo draft

Bill, I added some details, especially on the derivatives stuff. Mike [attachment "AIG memo v2.mg.doc" deleted by Brian F Madigan/BOARD/FRS] ▼ William B English/BOARD/FRS
William B English/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD Partial memo draft

09/13/2008 05:32 PM

Attached is a rough draft of the first part of our memo. I was not sure where to stop, so I put in some discussion of the current problems (which may overlap with Jon's discussion of liquidity in the second section) and of the possible spillovers (which may overlap with the Nelson/Clouse discussion of the pros and cons of lending).
(b) (5)

Comments very welcome, Bill E. [attachment "AIG memo v2.doc" deleted by Michael S Gibson/BOARD/FRS] [attachment "Binder1.pdf" deleted by Michael S Gibson/BOARD/FRS]

BOG-- FOIA 10-251 --000371

From: To: Subject: Date: Attachments:

Coryann Stefansson BSR LIG Fw: Draft LFI Conference Call Notes - 9/13/08 7pm call - Revised Version 09/14/2008 03:20 PM Conference Call Notes 9.13.08 evening version 2.doc

some of this may be out dated but I thought that i would forward Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555
----- Forwarded by Coryann Stefansson/BOARD/FRS on 09/14/2008 03:20 PM ----Stacy O'Bryant/RICH/FRS@FRS

To

09/13/2008 09:42 PM

Sarah Dahlgren/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS, Jennifer Burns/RICH/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Coryann Stefansson/BOARD/FRS@BOARD, Chris Haley/BOS/FRS@FRS, Raymond A Bacon/BSR/CHI/FRS@FRS Draft LFI Conference Call Notes - 9/13/08 7pm call - Revised Version

cc Subject

Restricted F.R. Much better version of notes - thanks to Jennifer!

Stacy O'Bryant LFI/LCBO Project Manager, Banking Supervision and Regulation/Large Complex Bank Organizations The Federal Reserve Bank of Richmond, Charlotte Branch Office 704· 280· 0570 stacy.o'bryant@rich.frb.org www.richmondfed.org

BOG-- FOIA 10-251 --000372

Restricted F.R. Author: S. O’Bryant
Meeting Date: Meeting Subject: Purpose:

Page 1

Date: September 13, 2008

September 13, 2008 (7 p.m. EST) LFIT Conference Call LFIT/RSO Discussion on Market Events and Issues

Key Takeaways:
Not Responsive

BOG-- FOIA 10-251 --000373

Restricted F.R. Author: S. O’Bryant

Page 2

Date: September 13, 2008

Not Responsive

BOG-- FOIA 10-251 --000374

Restricted F.R. Author: S. O’Bryant

Page 3

Date: September 13, 2008

Not Responsive

AIG • •

(b)(4) & (b)(5)

(b)(4) & (b)(5)

• • LT Strategy (b)(4) & (b)(5) (b)(4) & (b)(5)

Tobias Adrian – looked at AIG from an systemic risk perspective;
(b) (5)

(b)(4) & (b)(5)

Not Responsive

BOG-- FOIA 10-251 --000375

Restricted F.R. Author: S. O’Bryant

Page 4

Date: September 13, 2008

Not Responsive

BOG-- FOIA 10-251 --000376

From: To: Subject: Date: Attachments:

Alejandro LaTorre Brian F Madigan Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today 09/14/2008 03:24 PM Pros and Cons of Lending to AIG.doc

Attached is a note we shared with Chris Cumming on pros and cons

----- Forwarded by Alejandro LaTorre/NY/FRS on 09/14/2008 03:23 PM ----Catherine Voigts/NY/FRS

To

09/14/2008 12:26 PM cc Subject

Patricia Mosser/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS NY Banksup AIG Monitoring and Analysis Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today

As Trish requested - my summary:
(b)(4), (b)(5), & (b)(8)

BOG-- FOIA 10-251 --000377

(b)(4), (b)(5), & (b)(8)

If anyone has further recollection of relevant details, please feel free to add. Thanks, Cathy

* * * * * * * * * Catherine Voigts Credit Risk Advisor Bank Supervision Group Federal Reserve Bank 212-720-2383

BOG-- FOIA 10-251 --000378

(b) (5)

1

BOG-- FOIA 10-251 --000379

(b) (5)

2

BOG-- FOIA 10-251 --000380

From: To: Subject: Date: Attachments:

Brian F Madigan Scott Alvarez; James A Clouse; William B English; William R Nelson; Roberto Perli; Michael S Gibson; Deborah P Bailey; Jon D Greenlee Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today 09/14/2008 03:26 PM Pros and Cons of Lending to AIG.doc

FYI.
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/14/2008 03:23 PM ----Alejandro LaTorre/NY/FRS@FRS

To cc Subject

Brian F Madigan/BOARD/FRS@BOARD Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today

09/14/2008 03:24 PM

Duplicate

Duplicate

BOG-- FOIA 10-251 --000381

From: To: Cc: Subject: Date: Attachments:

Melissa A Vanlandingham William Carlucci Jeff Stehm list of participants, affiliates, roles, etc 09/14/2008 03:29 PM Selected Affiliated Members of Payments and Settlement Systems September 2008.xlsm

Hi Bill, Here's the list. It does not include all DTCC participants. I selected major family groups, and have added more as appropriate. AIG is on it as of this morning. The settling bank information is not complete (didn't have it all). You can filter by group (Lehman, Citigroup, etc.). Let me know if you have an questions. Or if you need someone else added.

Melissa Vanlandingham Financial Services Analyst Board of Governors of the Federal Reserve System Division of Reserve Bank Operations and Payment Systems 202-530-6285

BOG-- FOIA 10-251 --000382

BOG-- FOIA 10-251 --000383

From: To: Cc: Subject: Date: Attachments:

William Carlucci Melissa A Vanlandingham Jeff Stehm Re: list of participants, affiliates, roles, etc 09/14/2008 03:32 PM Selected Affiliated Members of Payments and Settlement Systems September 2008.xlsm

Thank you Melissa. Best Regards,

(b) (5)

William Carlucci Senior Bank Examiner Federal Reserve Bank of New York 212-720-8969/212-855-3390 (DTC) ▼ Melissa A Vanlandingham/BOARD/FRS@BOARD
Melissa A Vanlandingham/BOARD/FRS@BOARD

To cc Subject

William Carlucci/NY/FRS@FRS Jeff Stehm/BOARD/FRS@BOARD list of participants, affiliates, roles, etc

09/14/2008 03:32 PM

Hi Bill,
Duplicate

BOG-- FOIA 10-251 --000384

From: To: Subject: Date:

William Carlucci Jeff Stehm Re: list of participants, affiliates, roles, etc 09/14/2008 03:38 PM

Okay, thank you. Best Regards, William Carlucci Senior Bank Examiner Federal Reserve Bank of New York 212-720-8969/212-855-3390 (DTC) ▼ Jeff Stehm/BOARD/FRS@BOARD
Jeff Stehm/BOARD/FRS@BOARD

To cc Subject

William Carlucci/NY/FRS@FRS

09/14/2008 03:38 PM

Re: list of participants, affiliates, roles, etc

Bill
(b) (5)

▼ William Carlucci ----- Original Message ----From: William Carlucci Sent: 09/14/2008 03:35 PM EDT To: Melissa Vanlandingham Cc: Jeff Stehm

Duplicate

BOG-- FOIA 10-251 --000385

From: To: Cc: Subject: Date: Attachments:

William R Nelson William B English; Roberto Perli; Michael S Gibson; Jon D Greenlee Brian F Madigan; James A Clouse draft AIG memo 09/14/2008 03:55 PM AIG memo v3.doc

Here is the current draft of the AIG memo. No need for additional comments at this time. Bill

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000386

(b) (5)

BOG-- FOIA 10-251 --000387

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BOG-- FOIA 10-251 --000388

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BOG-- FOIA 10-251 --000389

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BOG-- FOIA 10-251 --000390

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BOG-- FOIA 10-251 --000397

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BOG-- FOIA 10-251 --000398

From: To: Subject: Date: Attachments:

Coryann Stefansson BSR LIG Fw: LFI Exposures to AIG (9/13/08 AM Update) 09/14/2008 04:40 PM LFI Key Credit Exposures to AIG 091308.xls

Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555
----- Forwarded by Coryann Stefansson/BOARD/FRS on 09/14/2008 04:40 PM ----Brandon Hall/NY/FRS@FRS To 09/13/2008 01:00 PM cc Subject LFI Exposures to AIG (9/13/08 AM Update) BSR LFIC

RESTRICTED FR --Below and attached please find the most current version of LFI credit exposures to AIG. This data represents the best information available, culled from the sources at hand (i.e. not reaching out directly to the firms). Using flow-basis traffic, we will work to update this information over the course of today and going forward.

(b)(4), (b)(5), & (b)(8)

____________________________________ Brandon J. Hall Counterparty Credit Risk Monitoring & Analysis Federal Reserve Bank of New York 33 Liberty St. | New York, NY 10045 P: 212-720-1349 F: 212-720-1468 E: brandon.hall@ny.frb.org

BOG-- FOIA 10-251 --000399

BOG-- FOIA 10-251 --000400

From: Sent By: To: Subject: Date: Attachments:

Timothy Geithner Michael Held (b) (6) ; Donald L Kohn Fw: Pros and Cons on AIG lending 09/14/2008 04:41 PM Pros and Cons of Lending to AIG.doc Counterparty Exposure Report 9142008.xls AIG Subsidiaries.ppt

----- Forwarded by Michael Held/NY/FRS on 09/14/2008 04:40 PM ----Alejandro LaTorre/NY/FRS

To

09/14/2008 03:49 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Timothy Geithner/NY/FRS@FRS, Michael Silva/NY/FRS@FRS, Meg McConnell/NY/FRS@FRS, William Dudley/NY/FRS@FRS, William Rutledge/NY/FRS@FRS, Terrence Checki/NY/FRS@FRS, Susan Stiehm/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS Tanshel Pointer/NY/FRS@FRS Pros and Cons on AIG lending

cc Subject

Attached are the following documents: 1. A note describing the pros and cons of lending to AIG 2. A spreadsheet provided by AIG detailing the firms with the largest exposures to AIG (i.e. what firms stand to lose in the event of AIG default). The relevant column is "Total Exposure to AIG, Ranked". With the exception of the "lending" column, these figures are loss estimates. Derivative loss estimates are derived from current MTM provided by AIG. 3. A presentation describing what we know on AIG subsidiaries based on publicly available information. If there are questions, let us know. Regards, Alex

BOG-- FOIA 10-251 --000401

(b) (5)

1

BOG-- FOIA 10-251 --000402

(b) (5)

2

BOG-- FOIA 10-251 --000403

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --000404

Restricted FR AIG Subsidiaries: Are they a Source of Strength?
Chris Calabia, Erika Gottfried, Min Kim, Elise Liebers, Alexander Psomas, Danielle Vicente Bank Supervision Group Sunday, September 13, 2008

BOG-- FOIA 10-251 --000405

(b) (5)

(b) (5)

AIG Revenues by Segment (2007 $110.1 billion)

Asset Management , 4% AIGFP, 8% P&C, 42%

Life, 46%

BOG-- FOIA 10-251 --000406

Simplified Organizational Chart

American International Group, Inc (NY)

American Life Insur. Co (DE) Assets: $105.6 bn Capital: $7.1 bn

AIG Property Casualty Group

AGC Life Insurance Co (MO)

SunAmerica Life (AZ) Assets: $38.0 bn Capital: $4.7bn

National Union Fire Ins (PA) Assets: $34.2 bn Capital: $12.2 bn

See Next Slide

First SunAmerica Life Ins (NY)

American Home Assur.(NY) Assets: $27.9 bn Capital: $6.5 bn

AIG SunAmerica Life Assur. (AZ)

BOG-- FOIA 10-251 --000407

Life Insurance
AGC Life Insurance Co (Mo)

AIG Annuity Ins. Co (TX) Assets: $53.1 bn Capital: $3.2 bn

American General Life Ins. Co. (TX) Assets: $39.5 bn Capital: $5.5 bn

Amer. Int’l Life Assur. Co of NY (NY) Assets: $7.0 bn Capital: $0.4 bn

Variable Annuity Life Ins. Co. (TX) Assets: $62.9 bn Capital: $ 2.9bn

BOG-- FOIA 10-251 --000408

AIG - Summary of Financial and Ratings Information of Major Subsidiaries Financial data as of 6/30/08 American Life Insurance Co. L&H Insurance DE Variable Annuity Life L&H Insurance TX AIG Annuity Insurance Co L&H Insurance TX American General Life L&H Insurance TX National Union Fire Insurance Co. P&C PA American Home Assurance P&C NY American International Life L&H Insurance NY

($ in millions) Type of Business Home State Ratings* S&P Moodys Fitch Balance Sheet Highlights Total Assets % of Consolidated Assets ($1.0 trillion) Bonds Separate Accounts Total Capital Asset Valuation Reserve Unrealized Gains (Loss) Total Adjusted Capital (YE 2007) Authorized Control RBC Ratio (YE2007) RBC Ratio (YE 2007) Income Statement Highlights Net Income (excl. Capital Gains) Realized Capital Gains (Loss) Dividends to Parent** 2008 (first six months) 2007 2006 2005 2004

SunAmerica Life L&H Insurance AZ

AA+ WN (9/12/08) AA+ WN (9/12/08) AA+ WN (9/12/08) AA+ WN (9/12/08) AA+ WN (9/12/08) AA+ WN (9/12/08) AA+ WN (9/12/08) AA+ WN (9/12/08) Aa2 OS (5/28/08) Aa2 ON (8/7/08) Aa2 ON (8/7/08) Aa2 ON (8/7/08) Aa2 ON (8/7/08) Aa3 OS (5/28/08) Aa3 OS (5/28/08) Aa2 ON (8/7/08) AA+ WN (8/22/08) AA+ WN (8/22/08) AA+ WN (8/22/08) AA+ WN (8/22/08) AA+ WN (8/22/08) na AA+ WN (8/22/08) AA+ WN (8/22/08)

$105,606 10.1% $53,832 $37,122 $7,113 $363 ($706) na na na

$62,880 6.0% $24,287 $26,649 $2,911 $471 ($111) $3,632 $568 639%

$53,078 5.1% $40,098 $373 $3,224 $1,012 $23 $4,878 $666 732%

$39,489 3.8% $23,880 $2,685 $5,513 $289 ($906) $6,839 $1,063 644%

$38,003 3.6% $16,878 $215 $4,748 $1,047 ($497) $5,976 $836 714%

$34,190 3.3% $14,171 na $12,195 na $72 $11,373 $2,818 404%

$27,867 2.7% $15,614 na $6,527 na na $7,041 $1,602 440%

$7,005 0.7% $5,640 $120 $440 $715 $2 $662 $92 715%

$580 ($381)

$249 ($1,551)

$191 ($2,325)

$151 ($1,260)

$300 ($1,085)

$679 $206

$491 $1,185

$33 ($290)

$0 $1,033 $200 $50 $50

$0 $700 $400 $400 $360

$0 $400 $150 $0 $0

$0 $551 $208 $441 $301

$0 $700 $349 $480 $26

$1,109 $1,120 $0 $98 $207

$268 $615 $0 $32 $63

$50 $100 $62 $50 $0

* WN: Watch Negative, OS: Outlook Stable, ON: Outlook Negative ** In 2007, AIG parent collected $4.9 billion in dividends. In the first half of 2008, AIG parent collected $1.4 billion in dividends. (Source: 10K)
BOG-- FOIA 10-251 --000409

(b) (5)

BOG-- FOIA 10-251 --000410

From: To: Subject: Date:

Tim P Clark Coryann Stefansson Re: Fw: LFI Exposures to AIG (9/13/08 AM Update) 09/14/2008 04:45 PM

(b) (5)

▼ Coryann Stefansson/BOARD/FRS
Coryann Stefansson/BOARD/FRS To 09/14/2008 04:40 PM cc Subject Fw: LFI Exposures to AIG (9/13/08 AM Update) BSR LIG

Coryann S. Stefansson Associate Director Bank Supervision and Regulation Board of Governors Office 202-452-5287 Cell Number 202- 294- 9829 Assistant - Ms. Kimberly Jensik Kim.Jensik@frb.gov Office Number 202 736-5555
----- Forwarded by Coryann Stefansson/BOARD/FRS on 09/14/2008 04:40 PM ----Brandon Hall/NY/FRS@FRS To 09/13/2008 01:00 PM cc Subject LFI Exposures to AIG (9/13/08 AM Update) BSR LFIC

RESTRICTED FR --Below and attached please find the most current version of LFI credit exposures to AIG. This data represents the best information available, culled from the sources at hand (i.e. not reaching out directly to the firms). Using flow-basis traffic, we will work to update this information over the course of today and going forward.

Duplicate

BOG-- FOIA 10-251 --000411

From: To: Subject: Date:

Donald L Kohn Timothy Geithner Re: Fw: Pros and Cons on AIG lending 09/14/2008 05:00 PM

I would add

(b) (5)

▼ Timothy Geithner/NY/FRS@FRS
Timothy Geithner/NY/FRS@FRS Sent by: Michael Held/NY/FRS@FRS

To cc Subject

Kohn/BOARD/FRS@BOARD Fw: Pros and Cons on AIG lending

(b) (6)

Donald L

09/14/2008 04:41 PM

----- Forwarded by Michael Held/NY/FRS on 09/14/2008 04:40 PM ----Alejandro LaTorre/NY/FRS

To

09/14/2008 03:49 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Timothy Geithner/NY/FRS@FRS, Michael Silva/NY/FRS@FRS, Meg McConnell/NY/FRS@FRS, William Dudley/NY/FRS@FRS, William Rutledge/NY/FRS@FRS, Terrence Checki/NY/FRS@FRS, Susan Stiehm/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS Tanshel Pointer/NY/FRS@FRS Pros and Cons on AIG lending

cc Subject

Duplicate

BOG-- FOIA 10-251 --000412

From: To:

Subject: Date:

Patricia Mosser Adam Ashcraft; Alejandro LaTorre; Brian Peters; Christine Cumming; Christopher Calabia; Elise Liebers; Hayley Boesky; Jim Mahoney; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; William Walsh; Azish Filabi; Terrence Checki; Brian F Madigan; Scott Alvarez; Deborah P Bailey; Jon D Greenlee AIG update 09/14/2008 06:36 PM

From AIG CFO and Vice Chm: The capital injection plan that AIG and NYSID outlined earlier for us is now in serious doubt, due to withdrawal of one of the private equity investors, (b) (4) That plan combined private equity investment with asset sales, upstreaming of assets from P&C insurance subs to the parent, and a "wrap" of their GICs by (b) (4) to prevent the need to post collateral.
(b) (4) In the new plan, (b) (4) would provide equity jointly with We have very few details, but on the surface, it appears to be closer to a takeover offer. Effectively AIG would increase their shares outstanding by more than 100%, (b) (4) allowing to control the firm. The offer is also contingent upon AIG getting access to Fed lending facilities. AIG believes the offer is not realistic -both from an equity delusion standpoint and based on their conversations with us. They will keep us updated on future developments.

BOG-- FOIA 10-251 --000413

From: To: Subject: Date: Attachments:

Jon.D.Greenlee@frb.gov William Nelson Fw: My proposed insert to Monetary Affairs partial memo draft 09/14/2008 06:40 PM AIG memo v2.mg.bfm - DF edits 9-14-08.doc

Bill, Here is something that you may find helpful for the memo. Trish just sent we may need to get it ready again. Jon -------------------------Sent from my BlackBerry Wireless Handheld Given the email

----- Original Message ----From: Diane Fraser Sent: 09/14/2008 03:02 PM EDT To: Jon Greenlee Cc: Diane Fraser Subject: Re: My proposed insert to Monetary Affairs partial memo draft . . .plus some cosmetic nits I edited. Jon, would you please let me know of your comments.(See attached file: AIG memo v2.mg.bfm - DF edits 9-14-08.doc) Thanks, Diane

Jon D Greenlee/BOARD/FR S Diane Fraser/BOARD/FRS@BOARD 09/14/2008 07:33 AM Subject Fw: Partial memo draft

To cc

Duplicate

BOG-- FOIA 10-251 --000414

Duplicate

- AIG memo v2.mg.bfm - DF edits 9-14-08.doc

BOG-- FOIA 10-251 --000415

(b) (5)

BOG-- FOIA 10-251 --000416

(b) (5)

BOG-- FOIA 10-251 --000417

(b) (5)

BOG-- FOIA 10-251 --000418

(b) (5)

BOG-- FOIA 10-251 --000419

(b) (5)

BOG-- FOIA 10-251 --000420

(b) (5)

BOG-- FOIA 10-251 --000421

(b) (5)

BOG-- FOIA 10-251 --000422

(b) (5)

BOG-- FOIA 10-251 --000423

From: To: Subject: Date:

Jon.D.Greenlee@frb.gov Diane Fraser; Adrienne Haden Fw: AIG update 09/14/2008 06:41 PM

Fyi -------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Patricia Mosser Sent: 09/14/2008 06:40 PM EDT To: Adam Ashcraft; Alejandro LaTorre; Brian Peters; Christine Cumming; Christopher Calabia; Elise Liebers; Hayley Boesky; Jim Mahoney; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; William Walsh; Azish Filabi; Terrence Checki; Brian Madigan; Scott Alvarez; Deborah Bailey; Jon Greenlee Subject: AIG update From AIG CFO and Vice Chm:

Duplicate

BOG-- FOIA 10-251 --000424

From: To: Cc: Subject: Date:

Brian F Madigan James A Clouse; William B English; William R Nelson; Roberto Perli; Michael S Gibson; Patrick M Parkinson Brian F Madigan Fw: AIG update 09/14/2008 06:46 PM

----- Forwarded by Brian F Madigan/BOARD/FRS on 09/14/2008 06:42 PM ----Patricia Mosser/NY/FRS@FRS

To

09/14/2008 06:36 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Christine Cumming/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, Terrence Checki/NY/FRS, Brian F Madigan/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD AIG update

cc Subject

From AIG CFO and Vice Chm:
Duplicate

BOG-- FOIA 10-251 --000425

From: To: Cc: Subject: Date: Importance:

Deborah P Bailey (b) (6) ; Donald L Kohn; Randall S Kroszner; Elizabeth A Duke; Kevin Warsh; Brian F Madigan; Scott Alvarez Roger Cole Fw: AIG update 09/14/2008 06:47 PM High

Please see the update from Trish. The capital injection by jeopardy.
---- Forwarded by Deborah P Bailey/BOARD/FRS on 09/14/2008 06:42 PM ----Patricia Mosser/NY/FRS@FRS

(b) (4)

seems in

To

09/14/2008 06:36 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Christine Cumming/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, Terrence Checki/NY/FRS, Brian F Madigan/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD AIG update

cc Subject

From AIG CFO and Vice Chm:
Duplicate

BOG-- FOIA 10-251 --000426

From: To: Subject: Date:

Deborah P Bailey Norah Barger; Coryann Stefansson Fw: AIG update 09/14/2008 06:59 PM

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/14/2008 06:58 PM ----Patricia Mosser/NY/FRS@FRS

To

09/14/2008 06:36 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Christine Cumming/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, Terrence Checki/NY/FRS, Brian F Madigan/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD AIG update

cc Subject

From AIG CFO and Vice Chm:
Duplicate

BOG-- FOIA 10-251 --000427

From: To: Subject: Date:

William B English Brian F Madigan AIG 09/14/2008 07:15 PM

BrianIf there is anything to be done on AIG tonight, give me a call or e-mail. --Bill E.
(b) (6)

BOG-- FOIA 10-251 --000428

From: To: Subject: Date:

William R Nelson Patricia Mosser Re: Fw: AIG update 09/14/2008 07:31 PM

that sucks. I thought we'd dodged this one. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To

09/14/2008 06:46 PM cc Subject

James A Clouse/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD Brian F Madigan/BOARD/FRS@BOARD Fw: AIG update

----- Forwarded by Brian F Madigan/BOARD/FRS on 09/14/2008 06:42 PM ----Patricia Mosser/NY/FRS@FRS

To

09/14/2008 06:36 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Christine Cumming/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, Terrence Checki/NY/FRS, Brian F Madigan/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD AIG update

cc Subject

From AIG CFO and Vice Chm:
Duplicate

BOG-- FOIA 10-251 --000429

From: To: Subject: Date: Attachments:

William R Nelson Jon.D.Greenlee@frb.gov Re: Fw: My proposed insert to Monetary Affairs partial memo draft 09/14/2008 07:32 PM AIG memo v2.mg.bfm - DF edits 9-14-08.doc

thanks Jon. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Jon.D.Greenlee@frb.gov
Jon.D.Greenlee@frb.gov To 09/14/2008 06:40 PM cc Subject Fw: My proposed insert to Monetary Affairs partial memo draft "William Nelson" <William.R.Nelson@frb.gov>

Bill, Here is something that you may find helpful for the memo. email Trish just sent we may need to get it ready again. Jon -------------------------Sent from my BlackBerry Wireless Handheld Given the

Duplicate

BOG-- FOIA 10-251 --000430

From: To: Subject: Date:

Jon D Greenlee Sabeth I Siddique; James Embersit Fw: AIG update 09/14/2008 07:36 PM

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Patricia Mosser/NY/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/14/2008 07:36 PM -----

To

09/14/2008 06:36 PM

Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Christine Cumming/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, William Walsh/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, Terrence Checki/NY/FRS, Brian F Madigan/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD AIG update

cc Subject

From AIG CFO and Vice Chm:
Duplicate

BOG-- FOIA 10-251 --000431

From: To:

Subject: Date:

Adam Ashcraft Patricia Mosser; Alejandro LaTorre; Brian Peters; Christine Cumming; Christopher Calabia; Elise Liebers; Hayley Boesky; Jim Mahoney; Paul Whynott; Richard Charlton; Tobias Adrian; William Walsh; Azish Filabi; Terrence Checki; Brian F Madigan; Scott Alvarez; Deborah P Bailey; Jon D Greenlee Re: AIG update 09/14/2008 07:47 PM

(b) (5)

-------------------------Sent from my BlackBerry Wireless Handheld ▼ Patricia Mosser ----- Original Message ----From: Patricia Mosser Sent: 09/14/2008 06:40 PM EDT To: Adam Ashcraft; Alejandro LaTorre; Brian Peters; Christine Cumming; Christopher Calabia; Elise Liebers; Hayley Boesky; Jim Mahoney; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; William Walsh; Azish Filabi; Terrence Checki; Brian Madigan; Scott Alvarez; Deborah Bailey; Jon Greenlee Subject: AIG update

From AIG CFO and Vice Chm:

Duplicate

BOG-- FOIA 10-251 --000432

From: To: Subject: Date: Attachments:

Jon.D.Greenlee@frb.gov Sabeth Siddique; James Embersit; Adrienne Haden; Nina.Nichols@frb.gov Fw: State Street and RBS Update 09/14/2008 08:19 PM GPCAN009 EXCHANGE 09112008-113640.PDF

-------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Chris Haley Sent: 09/14/2008 08:19 PM EDT To: NY Bank Sup - CPC Updates Cc: Eric Rosengren; Jim Nolan; Maureen Savage; Jackie Palladino; Eileen Leighton; Rhonda Kelley; Scott Strah; LauraDuhamel Rogers; Maureen Tighe; Jennifer Hynes; Jeffrey Slone; Phil Patch; Gerard Donovan; Abdul Hasnudeen; Johan Seo; Paul Nadeau; Beverly Broderick; Peter McAvoy; Jamie Marsh; Paul Webster; Tony Bardascino; Timothy Daniels; Erin Long; Ken Fortier; Genevievette Walker; Kwayne Jennings Subject: State Street and RBS Update State Street Update Highlights of discussion with Stefan Gavell:

Not Responsive

Next names they are worried about are Merrill and AIG. (b)(4) & (b)(8)

(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --000433

Not Responsive

(See attached file: GPCAN009_EXCHANGE_09112008-113640.PDF)

113640.PDF

That's all for now......Chris

- GPCAN009 EXCHANGE 09112008-

BOG-- FOIA 10-251 --000434

Not Responsive

BOG-- FOIA 10-251 --000435

Not Responsive

BOG-- FOIA 10-251 --000436

Not Responsive

BOG-- FOIA 10-251 --000437

From: To: Subject: Date:

Alejandro LaTorre Gustavo A Suarez; JNellie Liang AIG commercial paper outstandings 09/14/2008 09:19 PM

Nellie/Gustavo; Any chance we can the underwriter, outstandings and rates for AIGs CP and ABCP programs; again very much in the spirit of what you've produced in the past first thing in the am tomorrow. Thanks! Regards, Alex

BOG-- FOIA 10-251 --000438

From: To: Cc: Subject: Date:

JNellie Liang Alejandro LaTorre Gustavo A Suarez; JNellie Liang; Daniel M Covitz Re: AIG commercial paper outstandings 09/14/2008 09:25 PM

Yes, we'll try our best. ▼ Alejandro LaTorre/NY/FRS@FRS
Alejandro LaTorre/NY/FRS@FRS

To cc Subject

Gustavo A Suarez/BOARD/FRS@BOARD, JNellie Liang/BOARD/FRS@BOARD

09/14/2008 09:19 PM

AIG commercial paper outstandings

Duplicate

BOG-- FOIA 10-251 --000439

From: To: Cc: Subject: Date:

Alejandro LaTorre JNellie Liang Daniel M Covitz; Gustavo A Suarez; JNellie Liang Re: AIG commercial paper outstandings 09/14/2008 09:26 PM

Thank you. ▼ JNellie Liang/BOARD/FRS@BOARD
JNellie Liang/BOARD/FRS@BOARD

To cc

Alejandro LaTorre/NY/FRS@FRS Gustavo A Suarez/BOARD/FRS@BOARD, JNellie Liang/BOARD/FRS@BOARD, Daniel M Covitz/BOARD/FRS@BOARD Re: AIG commercial paper outstandings

09/14/2008 09:28 PM Subject

Duplicate

BOG-- FOIA 10-251 --000440

From: To: Cc: Subject: Date: Attachments:

Diane.Fraser@frb.gov Christopher.Calabia@ny.frb.org Elise.Liebers@ny.frb.org; Erika.Gottfried@ny.frb.org; Min.Kim@ny.frb.org; Danielle.Vicente@ny.frb.org; Diane.Fraser@frb.gov Notes from 9-14-08 conf. call with NYSID Superintendent Eric Dinallo re: AIG 09/14/2008 10:06 PM Notes from conf. call with NYSID Sup. Dinallo re AIG (9-14-08).doc

Hi Chris, Attached are the notes I assembled for Board senior management regarding the discussions this morning with New York State Insurance Department regulators concerning AIG. Many thanks to the folks working with you on the AIG assignment for their input to and review of these notes. Please distribute to FRBNY folks as you see fit. Thank you, Diane - Notes from conf. call with NYSID Sup. Dinallo re AIG (9-14-08).doc

BOG-- FOIA 10-251 --000441

RESTRICTED FR Conference Call with Eric Dinallo, Superintendent New York State Insurance Department (NYSID) Regarding the Financial Condition of American International Group, Inc. (AIG) September 14, 2008
(b)(4), (b)(5), & (b)(8)

1

BOG-- FOIA 10-251 --000442

RESTRICTED FR
(b)(4), (b)(5), & (b)(8)

2

BOG-- FOIA 10-251 --000443

RESTRICTED FR
(b)(4), (b)(5), & (b)(8)

3

BOG-- FOIA 10-251 --000444

RESTRICTED FR
(b)(4), (b)(5), & (b)(8)

4

BOG-- FOIA 10-251 --000445

From: To: Cc: Subject: Date: Attachments:

Diane.Fraser@frb.gov Jon.D.Greenlee@frb.gov Adrienne.Haden@frb.gov; Diane.Fraser@frb.gov Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIG 09/14/2008 10:09 PM Notes from conf. call with NYSID Sup. Dinallo re AIG (9-14-08).doc

Jon, Per your request. Please distribute to others who may find these notes useful. Diane - Notes from conf. call with NYSID Sup. Dinallo re AIG (9-14-08).doc
Attachment is a duplicate

BOG-- FOIA 10-251 --000446

From: To: Cc: Subject: Date:

Donald L Kohn

(b) (6) ; Timothy Geithner brian.f.madigan@frb.gov; Scott Alvarez; Deborah P Bailey AIG 09/14/2008 10:14 PM

Call from Frankel and Willumsted tonight renewing request for FR credit. Main points: Expect downgrade tomorrow which will accelerate demand for collateral. Probably enough liquidity to get to Weds., but not much further. Need 50 b liquidity. Have 8, can get 15 more out of insurance subs, but would only be approved if part of plan to get back to health. Board rejected (b) (4) offer, which he described as, in effect, 10b of equity in exchange for 60 percent of the companya nd conditioned on access to Fed window. (Also would fire board and upper management.) Board voted to authorize sale of subs if necessary to repay FR credit (b) (5) Two asset sales in negotiation for combined 11-13 b, but neither are sure and both would require regualtory approvals and hence take months. (b) (4) talking a bout 10b equity, but very vague. portrayed access to FR credit as necessary to enable equity raise. Notjhing to announce tomorrow morning.
(b) (5)

I was completley noncommital--didn't comment at all on request. Simply said I would relay conversation to colleagues. Willing to talk tonight, Tim, if you think it's necessary. Otherwise we should consult tomorrow morning. Don

BOG-- FOIA 10-251 --000447

From: To: Subject: Date: Attachments:

Michael S Gibson Patrick M Parkinson Fw: draft AIG memo 09/14/2008 10:16 PM AIG memo v3.doc

FYI - According to Bill this will not be sent to the Board. Mike
----- Forwarded by Michael S Gibson/BOARD/FRS on 09/14/2008 10:16 PM ----William R Nelson/BOARD/FRS

To

09/14/2008 03:55 PM cc Subject

William B English/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD Brian F Madigan/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD draft AIG memo

Here is the current draft of the AIG memo. No need for additional comments at this time. Bill

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000448

(b) (5)

BOG-- FOIA 10-251 --000449

(b) (5)

BOG-- FOIA 10-251 --000450

(b) (5)

BOG-- FOIA 10-251 --000451

(b) (5)

BOG-- FOIA 10-251 --000452

(b) (5)

BOG-- FOIA 10-251 --000453

(b) (5)

BOG-- FOIA 10-251 --000454

(b) (5)

BOG-- FOIA 10-251 --000455

(b) (5)

BOG-- FOIA 10-251 --000456

(b) (5)

BOG-- FOIA 10-251 --000457

(b) (5)

BOG-- FOIA 10-251 --000458

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BOG-- FOIA 10-251 --000459

(b) (5)

BOG-- FOIA 10-251 --000460

From: To: Subject: Date:

William R Nelson Sandy Krieger AIG 09/14/2008 10:31 PM

Hi Sandy,
(b) (5)

Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000461

From: To: Subject: Date:

William R Nelson Sandy Krieger Re: AIG 09/14/2008 10:41 PM

(b) (5)

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Sandy Krieger/NY/FRS@FRS
Sandy Krieger/NY/FRS@FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD Re: AIG

09/14/2008 10:39 PM

Thanks. I tried to choose my words carefully, " don't know of any decisions to lend." ----------------Sent from my BlackBerry Handheld.

BOG-- FOIA 10-251 --000462

From: To: Subject: Date:

Craig F Marchbanks James Embersit; David K Lynch; Ricardo Crumble; Mary L Arnett Fw: SGNY update 09/15/2008 12:18 AM

Regards, Craig F. Marchbanks Federal Reserve Board of Governors Banking Supervision & Regulation Market & Liquidity Risk Section (202) 452-3442 - Office (202) 446-7051 - Cell
Dennis Ryan/NY/FRS@FRS

----- Forwarded by Craig F Marchbanks/BOARD/FRS on 09/15/2008 12:17 AM -----

To

09/15/2008 12:05 AM

Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS, Anthony Cirillo/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, Ashish Bhatia/NY/FRS@FRS, Barbara Yelcich/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS, Brandon Hall/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Bridget Habib/NY/FRS@FRS, Caren Cox/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS, Catherine A Tilford/BOARD/FRS@BOARD, Catherine Voigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, Chris McCurdy/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS, Corbin Long/NY/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Craig F Marchbanks/BOARD/FRS@BOARD, Daniel Muccia/NY/FRS@FRS, Debra Capurso/NY/FRS@FRS, Denise Goodstein/NY/FRS@FRS, Dennis Ryan/NY/FRS@FRS, Dexter Williams/NY/FRS@FRS, Diane Rose/RICH/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Genevievette.E.Walker@frb.gov, Gretchen Cappiello/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS, Helen Mucciolo/NY/FRS@FRS, Homer Hill/NY/FRS@FRS, Jack Jennings/BOARD/FRS@BOARD, James Hodgetts/NY/FRS@FRS, James Wall/NY/FRS@FRS, Jan Voigts/NY/FRS@FRS, Jane Majeski/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS, Jeanmarie Davis/NY/FRS@FRS, Jennifer Burns/RICH/FRS@FRS, Jim Mahoney/NY/FRS@FRS, John Beebe/RICH/FRS@FRS, John Heinze/NY/FRS@FRS, John Leiby/NY/FRS@FRS, John Reynolds/NY/FRS@FRS, John Ricketti/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Jonathan Polk/NY/FRS@FRS, Joseph Galati/NY/FRS@FRS, Judith J Gruttman/NY/FRS@FRS, Jyoti Kohli/BOARD/FRS@BOARD, Kara Sulmasy/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS, Katheryn Van der Celen/NY/FRS@FRS, Kathryn Chen/NY/FRS@FRS, Kevin Clarke/NY/FRS@FRS, Kevin Lee/NY/FRS@FRS, Kirsten Harlow/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS, Lance Auer/NY/FRS@FRS, Larry Bonnemere/NY/FRS@FRS, Laura A Macedo/BOARD/FRS@BOARD, Lily Tham/NY/FRS@FRS, Lisa A White/RICH/FRS@FRS, Lisa Joniaux/NY/FRS@FRS, Lucinda M Brickler/NY/FRS@FRS, Lydia Tshulos/NY/FRS@FRS, Marilyn Arbuthnott/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS,
BOG-- FOIA 10-251 --000463

Pamela S Powell/BOARD/FRS@BOARD, Pat Soriano/BOARD/FRS@BOARD, Patrick Roche/NY/FRS@FRS, Philip Aquilino/SF/FRS@FRS, Ralph Santasiero/NY/FRS@FRS, Richard Naylor/BOARD/FRS@BOARD, Richard Roberts/NY/FRS@FRS, Richard Westerkamp/RICH/FRS@FRS, Robard Williams/NY/FRS@FRS, Robert Gutierrez/NY/FRS@FRS, Roger Graham/NY/FRS@FRS, Ronald Stroz/NY/FRS@FRS, Sandy Krieger/NY/FRS@FRS, Sara Mahmoud/NY/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stacy.L.Coleman@rich.frb.org, Stanley Poszywak/RICH/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS, Terry Muckleroy/BOARD/FRS@BOARD, Theodore Lubke/NY/FRS@FRS, Theresa Barry/BOS/FRS@FRS, Tim.P.Clark@frb.gov, Todd Waszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS, William BRODOWS/NY/FRS@FRS, William Hallacy/NY/FRS@FRS, Wing Oon/NY/FRS@FRS, Zahra El-Mekkawy/NY/FRS@FRS cc Adrian Lawrence/NY/FRS@FRS, Dmitry J Gershik/NY/FRS@FRS, Renuka Vijayanathan/NY/FRS@FRS, Hasan Latif/NY/FRS@FRS SGNY update

Subject

Restricted FR SG - Diony Lebot (NY - CEO), Mark Kaplan (NY - CAO) , Liz Hogan (NY - Co head of Fixed Income, Currency and Commodities), Francois Barthelemy (NY - head of Equity trading), Jerome Jacques (NY - Co head of Fixed Income, Currency and Commodities), Jack Baldwin (NY - Chief Risk Officer).
(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --000464

Not Responsive

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000465

From: To: Subject: Date: Attachments:

William R Nelson Brian F Madigan Fw: My proposed insert to Monetary Affairs partial memo draft 09/15/2008 06:58 AM AIG memo v2.mg.bfm - DF edits 9-14-08.doc

this might be worth adding. see text in red below. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

(b) (5)

----- Forwarded by William R Nelson/BOARD/FRS on 09/15/2008 06:57 AM ----Jon.D.Greenlee@frb.gov To 09/14/2008 06:40 PM cc Subject Fw: My proposed insert to Monetary Affairs partial memo draft "William Nelson" <William.R.Nelson@frb.gov>

Duplicate

Jon D Greenlee/BOARD/FR S Diane Fraser/BOARD/FRS@BOARD 09/14/2008 07:33 AM Fw: Partial memo draft

To cc Subject

BOG-- FOIA 10-251 --000466

Duplicate

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/14/2008 07:32 AM ----Jon D Greenlee/BOARD/FR S Brian F Madigan/BOARD/FRS@BOARD 09/14/2008 07:32 AM cc Clouse/BOARD/FRS@Board, S Gibson/BOARD/FRS@Board, Perli/BOARD/FRS@Board, B English/BOARD/FRS@Board Subject Re: Partial memo draft(Document link: Jon D Greenlee) James A Michael Roberto William

To

(b) (5)

We can provide some language on this later today. Thanks Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

Duplicate

BOG-- FOIA 10-251 --000467

(b) (5)

BOG-- FOIA 10-251 --000468

(b) (5)

BOG-- FOIA 10-251 --000469

(b) (5)

BOG-- FOIA 10-251 --000470

(b) (5)

BOG-- FOIA 10-251 --000471

(b) (5)

BOG-- FOIA 10-251 --000472

(b) (5)

BOG-- FOIA 10-251 --000473

(b) (5)

BOG-- FOIA 10-251 --000474

(b) (5)

BOG-- FOIA 10-251 --000475

From: To: Subject: Date: Attachments:

William R Nelson Brian F Madigan Re: Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today 09/15/2008 07:31 AM Pros and Cons of Lending to AIG.doc

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To

09/14/2008 03:26 PM

Scott Alvarez/BOARD/FRS@BOARD, James A Clouse/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today

cc Subject

FYI.
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/14/2008 03:23 PM ----Alejandro LaTorre/NY/FRS@FRS

To cc Subject

Brian F Madigan/BOARD/FRS@BOARD Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 today

09/14/2008 03:24 PM

Duplicate

Duplicate

BOG-- FOIA 10-251 --000476

From: To: Subject: Date: Attachments:

William R Nelson Brian F Madigan aig's value is down 44 percent this morning ... 09/15/2008 08:03 AM AIG memo v4.doc Binder1.pdf

.... on the silence about a liquidity deal. here is the document and the appendix.

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000477

(b) (5)

BOG-- FOIA 10-251 --000478

(b) (5)

BOG-- FOIA 10-251 --000479

(b) (5)

BOG-- FOIA 10-251 --000480

(b) (5)

BOG-- FOIA 10-251 --000481

(b) (5)

BOG-- FOIA 10-251 --000482

(b) (5)

BOG-- FOIA 10-251 --000483

(b) (5)

BOG-- FOIA 10-251 --000484

(b) (5)

BOG-- FOIA 10-251 --000485

(b) (5)

BOG-- FOIA 10-251 --000486

(b) (5)

BOG-- FOIA 10-251 --000487

(b) (5)

BOG-- FOIA 10-251 --000488

(b) (5)

BOG-- FOIA 10-251 --000489

American International Group, Inc. and Subsidiaries

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEET

(in millions) (unaudited)

June 30, 2008 Assets: Investments and Financial Services assets: Fixed maturity securities: Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 – $393,170) Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) Bond trading securities, at fair value Equity securities: Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) Common and preferred stocks trading, at fair value Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) Mortgage and other loans receivable, net of allowance (2008 – $99; 2007 – $77) (held for sale: 2008 – $30; 2007 – $377 (amount measured at fair value: 2008 – $745) Financial Services assets: Flight equipment primarily under operating leases, net of accumulated depreciation (2008 – $11,359; 2007 – $10,499) Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) Trading securities, at fair value Spot commodities, at fair value Unrealized gain on swaps, options and forward transactions, at fair value Trade receivables Securities purchased under agreements to resell, at fair value in 2008 Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale: 2008 – $36; 2007 – $233) Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) Short-term investments (amount measured at fair value: 2008 – $24,167) Total Investments and Financial Services assets Cash Investment income due and accrued Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) Current and deferred income taxes Deferred policy acquisition costs Investments in partially owned companies Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 – $5,446) Separate and variable accounts, at fair value Goodwill Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) Total assets
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$ 393,316 21,632 8,801 17,306 22,514 2,496 34,384

$ 397,372 21,581 9,982 17,900 21,376 2,370 33,727

43,887 1,205 35,170 90 11,548 2,294 16,597 33,311 59,530 62,029 69,492 835,602 2,229 6,614 20,050 22,940 8,211 46,733 628 5,692 73,401 10,661 17,115 $1,049,876

41,984 40,305 4,197 238 12,318 672 20,950 31,234 75,662 58,823 51,351 842,042 2,284 6,587 18,395 23,103 — 43,914 654 5,518 78,684 9,414 17,766 $1,048,361

1

BOG-- FOIA 10-251 --000490

American International Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET
(in millions, except share data) (unaudited)

(continued)

June 30, 2008 Liabilities: Reserve for losses and loss expenses Unearned premiums Future policy benefits for life and accident and health insurance contracts Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) Other policyholders’ funds Commissions, expenses and taxes payable Insurance balances payable Funds held by companies under reinsurance treaties Current income taxes payable Financial Services liabilities: Securities sold under agreements to repurchase (amount measured at fair value: 2008 – $8,338) Trade payables Securities and spot commodities sold but not yet purchased, at fair value Unrealized loss on swaps, options and forward transactions, at fair value Trust deposits and deposits due to banks and other depositors (amount measured at fair value: 2008 – $240) Commercial paper and extendible commercial notes Long-term borrowings (amount measured at fair value: 2008 – $53,839) Separate and variable accounts Securities lending payable Minority interest Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) Total liabilities Preferred shareholders’ equity in subsidiary companies Commitments, Contingencies and Guarantees (See Note 6) Shareholders’ equity: Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2008 – 2,948,038,001; 2007 – 2,751,327,476 Additional paid-in capital Payments advanced to purchase shares Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock Total shareholders’ equity Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$

88,747 28,738 147,232 265,411 13,773 5,597 5,569 2,498 —

$

85,500 27,703 136,387 258,459 12,599 6,310 4,878 2,501 3,823

9,659 1,622 3,189 24,232 6,165 15,061 163,577 73,401 75,056 11,149 31,012 971,688 100

8,331 6,445 4,709 14,817 4,903 13,114 162,935 78,684 81,965 10,422 27,975 952,460 100

7,370 9,446 — 73,743 (3,903) (8,568) 78,088 $1,049,876

6,878 2,848 (912) 89,029 4,643 (6,685) 95,801 $1,048,361

2

BOG-- FOIA 10-251 --000491

American International Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in millions, except per share data) (unaudited)

Three Months Ended June 30, 2008 2007 Revenues: Premiums and other considerations Net investment income Net realized capital losses Unrealized market valuation losses on AIGFP super senior credit default swap portfolio Other income Total revenues Benefits and expenses: Incurred policy losses and benefits Insurance acquisition and other operating expenses Total benefits and expenses Income (loss) before income taxes (benefits) and minority interest Income taxes (benefits) Income (loss) before minority interest Minority interest Net income (loss) Earnings (loss) per common share: Basic Diluted Dividends declared per common share Average shares outstanding: Basic Diluted
See Accompanying Notes to Consolidated Financial Statements.

Six Months Ended June 30, 2008 2007 $ 42,407 11,682 (12,170) (14,672) 6,717 33,964 34,332 19,652 53,984 (20,020) (6,894) (13,126) (36) $(13,162) $ $ (5.11) (5.11) $39,175 14,977 (98) — 7,741 61,795 32,367 16,928 49,295 12,500 3,405 9,095 (688) $ 8,407 $ $ 3.22 3.21

$21,735 6,728 (6,081) (5,565) 3,116 19,933 18,450 10,239 28,689 (8,756) (3,357) (5,399) 42 $ (5,357) $ (2.06) $ (2.06) $ 0.220 2,605 2,605

$19,533 7,853 (28) — 3,792 31,150 16,221 8,601 24,822 6,328 1,679 4,649 (372) $ 4,277 $ $ 1.64 1.64

$ 0.200 2,602 2,613

$ 0.420 2,575 2,575

$ 0.365 2,607 2,621

3

BOG-- FOIA 10-251 --000492

American International Group, Inc. and Subsidiaries

Segment Results
The following table summarizes the operations of each principal segment: (See also Note 2 to Consolidated Financial Statements.)
Operating Segments
(in millions)

Three Months Ended June 30, 2008 2007 $ 12,757 10,161 (3,605) 797 208 (385) $ 19,933 827 (2,401) (5,905) (314) (715) (248) $ (8,756) $ $12,928 14,023 2,123 1,781 263 32 $31,150 $ 2,976 2,620 47 927 (460) 218 $ 6,328

Percentage Increase/ (Decrease)

Six Months Ended June 30, 2008 2007 $25,831 27,705 4,324 3,450 394 91 $61,795 $ 6,072 4,901 339 1,685 (930) 433 $12,500

Percentage Increase/ (Decrease) (3)% (32) — (81) (80) — (45)% (64)% — — — — — —%

Total revenues(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total Operating income (loss)(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total

(1)% $ 25,046 (28) 18,913 — (10,165) (55) 648 (21) 80 — (558) (36)% $ 33,964 (72)% $ 2,164 — (4,232) — (14,677) — (1,565) — (1,483) — (227) — $(20,020)

(a) Includes other-than-temporary impairment charges of $6.8 billion and $417 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $12.4 billion and $884 million for the six-month periods ended June 30, 2008 and 2007, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS No. 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ (FAS 133), including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $272 million and $(430) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(476) million and $(882) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (b) Includes other-than-temporary impairment charges of $5.2 billion and $324 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $9.6 billion and $716 million for the six-month periods ended June 30, 2008 and 2007, respectively. (c) Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $5 million and $(443) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(199) million and $(603) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (d) For the three- and six-month periods ended June 30, 2008, both revenues and operating income (loss) include unrealized market valuation losses of BOG-- FOIA 10-251 --000493 $5.6 billion and $14.7 billion, respectively, on AIGFP’s super senior credit default swap portfolio. (e) Includes net realized capital losses of $464 million and $1.9 billion for the three- and six-month periods ended June 30, 2008, respectively, including otherthan-temporary impairment charges of $882 million and $1.9 billion, respectively.

From: To: Subject: Date:

William R Nelson Roberto Perli aig 09/15/2008 08:28 AM

what were they rated by the three rating agencies on Friday? (long term senior unsecured). thanks. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000494

From: To: Subject: Date:

Kevin Warsh Michelle A Smith Re: Liesman wonders if he can say 09/15/2008 08:33 AM

(b) (5)

▼ Michelle A Smith/BOARD/FRS
Michelle A Smith/BOARD/FRS

To cc Subject

Kevin Warsh/BOARD/FRS@BOARD Liesman wonders if he can say

09/14/2008 11:31 PM

That the fed thinks aig shd pursue all other options before coming to us. Is that too explosive? Seems reasonable but maybe not reasonable for us to say or for steve to hype.

BOG-- FOIA 10-251 --000495

From: To: Subject: Date:

JNellie.Liang@frb.gov Patrick.M.Parkinson@frb.gov Re: CP 09/15/2008 08:47 AM

yes, and we are sending something up to NY on AIG this morning.

Patrick.M.Parkins on@frb.gov To 09/15/2008 08:39 AM

"Nellie Liang" <JNellie.Liang@frb.gov> cc Subject CP

Is Gustavo monitoring the roll rate at major nonbank financial issuers? Pat

BOG-- FOIA 10-251 --000496

From: To: Subject: Date: Attachments:

William R Nelson Brian F Madigan aig slightly revised 09/15/2008 08:47 AM AIG memo v4.doc Binder1.pdf

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000497

(b) (5)

BOG-- FOIA 10-251 --000498

(b) (5)

BOG-- FOIA 10-251 --000499

(b) (5)

BOG-- FOIA 10-251 --000500

(b) (5)

BOG-- FOIA 10-251 --000501

(b) (5)

BOG-- FOIA 10-251 --000502

(b) (5)

BOG-- FOIA 10-251 --000503

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BOG-- FOIA 10-251 --000504

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BOG-- FOIA 10-251 --000505

(b) (5)

BOG-- FOIA 10-251 --000506

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BOG-- FOIA 10-251 --000507

(b) (5)

BOG-- FOIA 10-251 --000508

(b) (5)

BOG-- FOIA 10-251 --000509

American International Group, Inc. and Subsidiaries

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEET

(in millions) (unaudited)

June 30, 2008 Assets: Investments and Financial Services assets: Fixed maturity securities: Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 – $393,170) Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) Bond trading securities, at fair value Equity securities: Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) Common and preferred stocks trading, at fair value Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) Mortgage and other loans receivable, net of allowance (2008 – $99; 2007 – $77) (held for sale: 2008 – $30; 2007 – $377 (amount measured at fair value: 2008 – $745) Financial Services assets: Flight equipment primarily under operating leases, net of accumulated depreciation (2008 – $11,359; 2007 – $10,499) Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) Trading securities, at fair value Spot commodities, at fair value Unrealized gain on swaps, options and forward transactions, at fair value Trade receivables Securities purchased under agreements to resell, at fair value in 2008 Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale: 2008 – $36; 2007 – $233) Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) Short-term investments (amount measured at fair value: 2008 – $24,167) Total Investments and Financial Services assets Cash Investment income due and accrued Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) Current and deferred income taxes Deferred policy acquisition costs Investments in partially owned companies Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 – $5,446) Separate and variable accounts, at fair value Goodwill Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) Total assets
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$ 393,316 21,632 8,801 17,306 22,514 2,496 34,384

$ 397,372 21,581 9,982 17,900 21,376 2,370 33,727

43,887 1,205 35,170 90 11,548 2,294 16,597 33,311 59,530 62,029 69,492 835,602 2,229 6,614 20,050 22,940 8,211 46,733 628 5,692 73,401 10,661 17,115 $1,049,876

41,984 40,305 4,197 238 12,318 672 20,950 31,234 75,662 58,823 51,351 842,042 2,284 6,587 18,395 23,103 — 43,914 654 5,518 78,684 9,414 17,766 $1,048,361

1

BOG-- FOIA 10-251 --000510

American International Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET
(in millions, except share data) (unaudited)

(continued)

June 30, 2008 Liabilities: Reserve for losses and loss expenses Unearned premiums Future policy benefits for life and accident and health insurance contracts Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) Other policyholders’ funds Commissions, expenses and taxes payable Insurance balances payable Funds held by companies under reinsurance treaties Current income taxes payable Financial Services liabilities: Securities sold under agreements to repurchase (amount measured at fair value: 2008 – $8,338) Trade payables Securities and spot commodities sold but not yet purchased, at fair value Unrealized loss on swaps, options and forward transactions, at fair value Trust deposits and deposits due to banks and other depositors (amount measured at fair value: 2008 – $240) Commercial paper and extendible commercial notes Long-term borrowings (amount measured at fair value: 2008 – $53,839) Separate and variable accounts Securities lending payable Minority interest Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) Total liabilities Preferred shareholders’ equity in subsidiary companies Commitments, Contingencies and Guarantees (See Note 6) Shareholders’ equity: Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2008 – 2,948,038,001; 2007 – 2,751,327,476 Additional paid-in capital Payments advanced to purchase shares Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock Total shareholders’ equity Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$

88,747 28,738 147,232 265,411 13,773 5,597 5,569 2,498 —

$

85,500 27,703 136,387 258,459 12,599 6,310 4,878 2,501 3,823

9,659 1,622 3,189 24,232 6,165 15,061 163,577 73,401 75,056 11,149 31,012 971,688 100

8,331 6,445 4,709 14,817 4,903 13,114 162,935 78,684 81,965 10,422 27,975 952,460 100

7,370 9,446 — 73,743 (3,903) (8,568) 78,088 $1,049,876

6,878 2,848 (912) 89,029 4,643 (6,685) 95,801 $1,048,361

2

BOG-- FOIA 10-251 --000511

American International Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in millions, except per share data) (unaudited)

Three Months Ended June 30, 2008 2007 Revenues: Premiums and other considerations Net investment income Net realized capital losses Unrealized market valuation losses on AIGFP super senior credit default swap portfolio Other income Total revenues Benefits and expenses: Incurred policy losses and benefits Insurance acquisition and other operating expenses Total benefits and expenses Income (loss) before income taxes (benefits) and minority interest Income taxes (benefits) Income (loss) before minority interest Minority interest Net income (loss) Earnings (loss) per common share: Basic Diluted Dividends declared per common share Average shares outstanding: Basic Diluted
See Accompanying Notes to Consolidated Financial Statements.

Six Months Ended June 30, 2008 2007 $ 42,407 11,682 (12,170) (14,672) 6,717 33,964 34,332 19,652 53,984 (20,020) (6,894) (13,126) (36) $(13,162) $ $ (5.11) (5.11) $39,175 14,977 (98) — 7,741 61,795 32,367 16,928 49,295 12,500 3,405 9,095 (688) $ 8,407 $ $ 3.22 3.21

$21,735 6,728 (6,081) (5,565) 3,116 19,933 18,450 10,239 28,689 (8,756) (3,357) (5,399) 42 $ (5,357) $ (2.06) $ (2.06) $ 0.220 2,605 2,605

$19,533 7,853 (28) — 3,792 31,150 16,221 8,601 24,822 6,328 1,679 4,649 (372) $ 4,277 $ $ 1.64 1.64

$ 0.200 2,602 2,613

$ 0.420 2,575 2,575

$ 0.365 2,607 2,621

3

BOG-- FOIA 10-251 --000512

American International Group, Inc. and Subsidiaries

Segment Results
The following table summarizes the operations of each principal segment: (See also Note 2 to Consolidated Financial Statements.)
Operating Segments
(in millions)

Three Months Ended June 30, 2008 2007 $ 12,757 10,161 (3,605) 797 208 (385) $ 19,933 827 (2,401) (5,905) (314) (715) (248) $ (8,756) $ $12,928 14,023 2,123 1,781 263 32 $31,150 $ 2,976 2,620 47 927 (460) 218 $ 6,328

Percentage Increase/ (Decrease)

Six Months Ended June 30, 2008 2007 $25,831 27,705 4,324 3,450 394 91 $61,795 $ 6,072 4,901 339 1,685 (930) 433 $12,500

Percentage Increase/ (Decrease) (3)% (32) — (81) (80) — (45)% (64)% — — — — — —%

Total revenues(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total Operating income (loss)(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total

(1)% $ 25,046 (28) 18,913 — (10,165) (55) 648 (21) 80 — (558) (36)% $ 33,964 (72)% $ 2,164 — (4,232) — (14,677) — (1,565) — (1,483) — (227) — $(20,020)

(a) Includes other-than-temporary impairment charges of $6.8 billion and $417 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $12.4 billion and $884 million for the six-month periods ended June 30, 2008 and 2007, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS No. 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ (FAS 133), including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $272 million and $(430) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(476) million and $(882) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (b) Includes other-than-temporary impairment charges of $5.2 billion and $324 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $9.6 billion and $716 million for the six-month periods ended June 30, 2008 and 2007, respectively. (c) Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $5 million and $(443) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(199) million and $(603) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (d) For the three- and six-month periods ended June 30, 2008, both revenues and operating income (loss) include unrealized market valuation losses of BOG-- FOIA 10-251 --000513 $5.6 billion and $14.7 billion, respectively, on AIGFP’s super senior credit default swap portfolio. (e) Includes net realized capital losses of $464 million and $1.9 billion for the three- and six-month periods ended June 30, 2008, respectively, including otherthan-temporary impairment charges of $882 million and $1.9 billion, respectively.

From: To: Cc: Bcc: Subject: Date:

Diane Fraser Elise Liebers; Christopher Calabia Diane.Fraser@frb.gov William B English News re: AIG, facing liquidity crunch, seeking loan from Fed 09/15/2008 08:50 AM

Business Insurance

AIG, facing liquidity crunch, seeks loan from Fed Sept. 14, 2008 NEW YORK—Insurer American International Group Inc., working to stave off rating downgrades and shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve seeking short-term financing, media reports said. Chief Executive Robert Willumstad reached out to the Fed late on Sunday, according to the Wall Street Journal and business news channel CNBC. The New York Times reported Sunday evening that AIG was seeking $40 billion in aid to avoid a downgrade from credit rating agencies. The Fed normally oversees monetary policy and supervision of banks, but CNBC said AIG was seeking the funds as a temporary measure and planned to repay the Fed with the proceeds from asset sales. AIG officials did not immediately respond to requests for comment. The company, until recently the world's biggest insurer by market capitalization, has been attempting to hammer out an emergency strategic plan after its shares fell nearly 50% last week on fears it faced a liquidity crisis. AIG has been negotiating with various parties including officials from the New York Insurance Department and private equity firms as it seeks ways to free up capital, raise new capital and protect policyholders. Regulators including New York Insurance Superintendent Eric Dinallo have been holed up at AIG's New York offices over the past two days trying to hammer out a plan.

BOG-- FOIA 10-251 --000514

"We are working to craft a solution to protect the company and policyholders," said a person from the New York Insurance Department, who asked not to be named. Former AIG CEO Maurice "Hank" Greenberg, who ran the company for nearly four decades, was not involved in any of the discussions, said his spokesman, Glen Rochkind. "He repeatedly offered to assist in anyway he could," added Mr. Rochkind. AIG, hit by $18 billion in losses over the past three quarters from guarantees it wrote on mortgage derivatives, has had to act quickly after Standard & Poor's said on Friday it may downgrade AIG's ratings. Ratings downgrades could force AIG to post up to $14.5 billion more in collateral, according to a regulatory filing last month. Downgrades could also be detrimental to AIG's insurance business, since some policies carry clauses that nullify a contract in the event of downgrades below a certain level. Over the weekend, the insurer has been working on a three-part plan involving asset sales, shifting regulated capital from the insurance operations to the holding company, and working with private equity investors, said a person familiar with the negotiations. Parties in capital-raising talks with AIG included buyout firms Kohlberg Kravis Roberts & Co (KKR.UL) and J.C. Flowers & Co, another person familiar with the talks said. An AIG spokesman earlier confirmed the company was evaluating a wide range of options, including asset sales. Media reports have said that one of the companies on the block was AIG's highly profitable aircraft leasing arm, but the spokesman declined to confirm this was the case. In late June, AIG said the unit, International Lease Finance Corp, would remain part of AIG. AIG was founded in China 89 years ago. In the years since, largely under Mr. Greenberg's watch, it grew into one of the world's largest insurers, spanning 130 countries and territories and serving 74 million customers. Mr. Greenberg stepped down in 2005, in the midst of an accounting scandal. His successor,
BOG-- FOIA 10-251 --000515

Martin Sullivan, was replaced by Mr. Willumstad in June after investors grew disgruntled over its three quarters of losses. Greenberg owns or controls about 12% of AIG's stock, making him the largest shareholder. Copyright 2008 Reuters Limited. Click for restrictions.

BOG-- FOIA 10-251 --000516

From: To: Subject: Date:

Roberto Perli William R Nelson Re: aig 09/15/2008 08:52 AM

Aa3 and AA-, I don't know fitch ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Roberto Perli/BOARD/FRS@BOARD aig

09/15/2008 08:28 AM

what were they rated by the three rating agencies on Friday? (long term senior unsecured). thanks. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000517

From: To: Cc: Subject: Date:

Donald L Kohn Timothy Geithner (b) (6) brian.f.madigan@frb.gov; Scott Alvarez; Patrick M Parkinson Fw: Thank you 09/15/2008 08:57 AM

(b) (5)

----- Forwarded by Donald L Kohn/BOARD/FRS on 09/15/2008 08:54 AM ----Brian F Madigan/BOARD/FRS

To cc Subject

Kohn/BOARD/FRS@BOARD Fw: Thank you

(b) (6)

Donald L

09/15/2008 08:51 AM

FYI.
----- Forwarded by Brian F Madigan/BOARD/FRS on 09/15/2008 08:48 AM -----

Not Responsive

BOG-- FOIA 10-251 --000518

From: To: Subject: Date:

William R Nelson Roberto Perli Re: aig 09/15/2008 09:00 AM

ok, htanks Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Roberto Perli/BOARD/FRS
Roberto Perli/BOARD/FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD

09/15/2008 08:52 AM

Re: aig

Aa3 and AA-, I don't know fitch ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Roberto Perli/BOARD/FRS@BOARD aig

09/15/2008 08:28 AM

what were they rated by the three rating agencies on Friday? (long term senior unsecured). thanks. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000519

From: To: Subject: Date: Attachments:

William R Nelson Scott Alvarez Fw: aig slightly revised 09/15/2008 09:01 AM AIG memo v4.doc Binder1.pdf

Hi Scott, Brian asked that I send this to you. --Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
William R Nelson/BOARD/FRS

----- Forwarded by William R Nelson/BOARD/FRS on 09/15/2008 09:01 AM -----

To cc Subject

Brian F Madigan/BOARD/FRS@BOARD aig slightly revised

09/15/2008 08:47 AM

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000520

(b) (5)

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(b) (5)

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(b) (5)

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(b) (5)

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BOG-- FOIA 10-251 --000532

American International Group, Inc. and Subsidiaries

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEET

(in millions) (unaudited)

June 30, 2008 Assets: Investments and Financial Services assets: Fixed maturity securities: Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 – $393,170) Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) Bond trading securities, at fair value Equity securities: Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) Common and preferred stocks trading, at fair value Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) Mortgage and other loans receivable, net of allowance (2008 – $99; 2007 – $77) (held for sale: 2008 – $30; 2007 – $377 (amount measured at fair value: 2008 – $745) Financial Services assets: Flight equipment primarily under operating leases, net of accumulated depreciation (2008 – $11,359; 2007 – $10,499) Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) Trading securities, at fair value Spot commodities, at fair value Unrealized gain on swaps, options and forward transactions, at fair value Trade receivables Securities purchased under agreements to resell, at fair value in 2008 Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale: 2008 – $36; 2007 – $233) Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) Short-term investments (amount measured at fair value: 2008 – $24,167) Total Investments and Financial Services assets Cash Investment income due and accrued Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) Current and deferred income taxes Deferred policy acquisition costs Investments in partially owned companies Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 – $5,446) Separate and variable accounts, at fair value Goodwill Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) Total assets
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$ 393,316 21,632 8,801 17,306 22,514 2,496 34,384

$ 397,372 21,581 9,982 17,900 21,376 2,370 33,727

43,887 1,205 35,170 90 11,548 2,294 16,597 33,311 59,530 62,029 69,492 835,602 2,229 6,614 20,050 22,940 8,211 46,733 628 5,692 73,401 10,661 17,115 $1,049,876

41,984 40,305 4,197 238 12,318 672 20,950 31,234 75,662 58,823 51,351 842,042 2,284 6,587 18,395 23,103 — 43,914 654 5,518 78,684 9,414 17,766 $1,048,361

1

BOG-- FOIA 10-251 --000533

American International Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET
(in millions, except share data) (unaudited)

(continued)

June 30, 2008 Liabilities: Reserve for losses and loss expenses Unearned premiums Future policy benefits for life and accident and health insurance contracts Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) Other policyholders’ funds Commissions, expenses and taxes payable Insurance balances payable Funds held by companies under reinsurance treaties Current income taxes payable Financial Services liabilities: Securities sold under agreements to repurchase (amount measured at fair value: 2008 – $8,338) Trade payables Securities and spot commodities sold but not yet purchased, at fair value Unrealized loss on swaps, options and forward transactions, at fair value Trust deposits and deposits due to banks and other depositors (amount measured at fair value: 2008 – $240) Commercial paper and extendible commercial notes Long-term borrowings (amount measured at fair value: 2008 – $53,839) Separate and variable accounts Securities lending payable Minority interest Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) Total liabilities Preferred shareholders’ equity in subsidiary companies Commitments, Contingencies and Guarantees (See Note 6) Shareholders’ equity: Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2008 – 2,948,038,001; 2007 – 2,751,327,476 Additional paid-in capital Payments advanced to purchase shares Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock Total shareholders’ equity Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$

88,747 28,738 147,232 265,411 13,773 5,597 5,569 2,498 —

$

85,500 27,703 136,387 258,459 12,599 6,310 4,878 2,501 3,823

9,659 1,622 3,189 24,232 6,165 15,061 163,577 73,401 75,056 11,149 31,012 971,688 100

8,331 6,445 4,709 14,817 4,903 13,114 162,935 78,684 81,965 10,422 27,975 952,460 100

7,370 9,446 — 73,743 (3,903) (8,568) 78,088 $1,049,876

6,878 2,848 (912) 89,029 4,643 (6,685) 95,801 $1,048,361

2

BOG-- FOIA 10-251 --000534

American International Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in millions, except per share data) (unaudited)

Three Months Ended June 30, 2008 2007 Revenues: Premiums and other considerations Net investment income Net realized capital losses Unrealized market valuation losses on AIGFP super senior credit default swap portfolio Other income Total revenues Benefits and expenses: Incurred policy losses and benefits Insurance acquisition and other operating expenses Total benefits and expenses Income (loss) before income taxes (benefits) and minority interest Income taxes (benefits) Income (loss) before minority interest Minority interest Net income (loss) Earnings (loss) per common share: Basic Diluted Dividends declared per common share Average shares outstanding: Basic Diluted
See Accompanying Notes to Consolidated Financial Statements.

Six Months Ended June 30, 2008 2007 $ 42,407 11,682 (12,170) (14,672) 6,717 33,964 34,332 19,652 53,984 (20,020) (6,894) (13,126) (36) $(13,162) $ $ (5.11) (5.11) $39,175 14,977 (98) — 7,741 61,795 32,367 16,928 49,295 12,500 3,405 9,095 (688) $ 8,407 $ $ 3.22 3.21

$21,735 6,728 (6,081) (5,565) 3,116 19,933 18,450 10,239 28,689 (8,756) (3,357) (5,399) 42 $ (5,357) $ (2.06) $ (2.06) $ 0.220 2,605 2,605

$19,533 7,853 (28) — 3,792 31,150 16,221 8,601 24,822 6,328 1,679 4,649 (372) $ 4,277 $ $ 1.64 1.64

$ 0.200 2,602 2,613

$ 0.420 2,575 2,575

$ 0.365 2,607 2,621

3

BOG-- FOIA 10-251 --000535

American International Group, Inc. and Subsidiaries

Segment Results
The following table summarizes the operations of each principal segment: (See also Note 2 to Consolidated Financial Statements.)
Operating Segments
(in millions)

Three Months Ended June 30, 2008 2007 $ 12,757 10,161 (3,605) 797 208 (385) $ 19,933 827 (2,401) (5,905) (314) (715) (248) $ (8,756) $ $12,928 14,023 2,123 1,781 263 32 $31,150 $ 2,976 2,620 47 927 (460) 218 $ 6,328

Percentage Increase/ (Decrease)

Six Months Ended June 30, 2008 2007 $25,831 27,705 4,324 3,450 394 91 $61,795 $ 6,072 4,901 339 1,685 (930) 433 $12,500

Percentage Increase/ (Decrease) (3)% (32) — (81) (80) — (45)% (64)% — — — — — —%

Total revenues(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total Operating income (loss)(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total

(1)% $ 25,046 (28) 18,913 — (10,165) (55) 648 (21) 80 — (558) (36)% $ 33,964 (72)% $ 2,164 — (4,232) — (14,677) — (1,565) — (1,483) — (227) — $(20,020)

(a) Includes other-than-temporary impairment charges of $6.8 billion and $417 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $12.4 billion and $884 million for the six-month periods ended June 30, 2008 and 2007, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS No. 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ (FAS 133), including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $272 million and $(430) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(476) million and $(882) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (b) Includes other-than-temporary impairment charges of $5.2 billion and $324 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $9.6 billion and $716 million for the six-month periods ended June 30, 2008 and 2007, respectively. (c) Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $5 million and $(443) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(199) million and $(603) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (d) For the three- and six-month periods ended June 30, 2008, both revenues and operating income (loss) include unrealized market valuation losses of BOG-- FOIA 10-251 --000536 $5.6 billion and $14.7 billion, respectively, on AIGFP’s super senior credit default swap portfolio. (e) Includes net realized capital losses of $464 million and $1.9 billion for the three- and six-month periods ended June 30, 2008, respectively, including otherthan-temporary impairment charges of $882 million and $1.9 billion, respectively.

From: To: Subject: Date: Attachments:

William R Nelson William B English; Roberto Perli; Michael S Gibson; Jon D Greenlee Fw: aig slightly revised 09/15/2008 09:02 AM AIG memo v4.doc Binder1.pdf

AIG is a hot issue this morning. here is the current draft of the memo. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
William R Nelson/BOARD/FRS

----- Forwarded by William R Nelson/BOARD/FRS on 09/15/2008 09:01 AM -----

To cc Subject

Brian F Madigan/BOARD/FRS@BOARD aig slightly revised

09/15/2008 08:47 AM

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000537

(b) (5)

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BOG-- FOIA 10-251 --000549

American International Group, Inc. and Subsidiaries

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEET

(in millions) (unaudited)

June 30, 2008 Assets: Investments and Financial Services assets: Fixed maturity securities: Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 – $393,170) Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) Bond trading securities, at fair value Equity securities: Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) Common and preferred stocks trading, at fair value Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) Mortgage and other loans receivable, net of allowance (2008 – $99; 2007 – $77) (held for sale: 2008 – $30; 2007 – $377 (amount measured at fair value: 2008 – $745) Financial Services assets: Flight equipment primarily under operating leases, net of accumulated depreciation (2008 – $11,359; 2007 – $10,499) Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) Trading securities, at fair value Spot commodities, at fair value Unrealized gain on swaps, options and forward transactions, at fair value Trade receivables Securities purchased under agreements to resell, at fair value in 2008 Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale: 2008 – $36; 2007 – $233) Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) Short-term investments (amount measured at fair value: 2008 – $24,167) Total Investments and Financial Services assets Cash Investment income due and accrued Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) Current and deferred income taxes Deferred policy acquisition costs Investments in partially owned companies Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 – $5,446) Separate and variable accounts, at fair value Goodwill Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) Total assets
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$ 393,316 21,632 8,801 17,306 22,514 2,496 34,384

$ 397,372 21,581 9,982 17,900 21,376 2,370 33,727

43,887 1,205 35,170 90 11,548 2,294 16,597 33,311 59,530 62,029 69,492 835,602 2,229 6,614 20,050 22,940 8,211 46,733 628 5,692 73,401 10,661 17,115 $1,049,876

41,984 40,305 4,197 238 12,318 672 20,950 31,234 75,662 58,823 51,351 842,042 2,284 6,587 18,395 23,103 — 43,914 654 5,518 78,684 9,414 17,766 $1,048,361

1

BOG-- FOIA 10-251 --000550

American International Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET
(in millions, except share data) (unaudited)

(continued)

June 30, 2008 Liabilities: Reserve for losses and loss expenses Unearned premiums Future policy benefits for life and accident and health insurance contracts Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) Other policyholders’ funds Commissions, expenses and taxes payable Insurance balances payable Funds held by companies under reinsurance treaties Current income taxes payable Financial Services liabilities: Securities sold under agreements to repurchase (amount measured at fair value: 2008 – $8,338) Trade payables Securities and spot commodities sold but not yet purchased, at fair value Unrealized loss on swaps, options and forward transactions, at fair value Trust deposits and deposits due to banks and other depositors (amount measured at fair value: 2008 – $240) Commercial paper and extendible commercial notes Long-term borrowings (amount measured at fair value: 2008 – $53,839) Separate and variable accounts Securities lending payable Minority interest Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) Total liabilities Preferred shareholders’ equity in subsidiary companies Commitments, Contingencies and Guarantees (See Note 6) Shareholders’ equity: Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2008 – 2,948,038,001; 2007 – 2,751,327,476 Additional paid-in capital Payments advanced to purchase shares Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock Total shareholders’ equity Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity
See Accompanying Notes to Consolidated Financial Statements.

December 31, 2007

$

88,747 28,738 147,232 265,411 13,773 5,597 5,569 2,498 —

$

85,500 27,703 136,387 258,459 12,599 6,310 4,878 2,501 3,823

9,659 1,622 3,189 24,232 6,165 15,061 163,577 73,401 75,056 11,149 31,012 971,688 100

8,331 6,445 4,709 14,817 4,903 13,114 162,935 78,684 81,965 10,422 27,975 952,460 100

7,370 9,446 — 73,743 (3,903) (8,568) 78,088 $1,049,876

6,878 2,848 (912) 89,029 4,643 (6,685) 95,801 $1,048,361

2

BOG-- FOIA 10-251 --000551

American International Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in millions, except per share data) (unaudited)

Three Months Ended June 30, 2008 2007 Revenues: Premiums and other considerations Net investment income Net realized capital losses Unrealized market valuation losses on AIGFP super senior credit default swap portfolio Other income Total revenues Benefits and expenses: Incurred policy losses and benefits Insurance acquisition and other operating expenses Total benefits and expenses Income (loss) before income taxes (benefits) and minority interest Income taxes (benefits) Income (loss) before minority interest Minority interest Net income (loss) Earnings (loss) per common share: Basic Diluted Dividends declared per common share Average shares outstanding: Basic Diluted
See Accompanying Notes to Consolidated Financial Statements.

Six Months Ended June 30, 2008 2007 $ 42,407 11,682 (12,170) (14,672) 6,717 33,964 34,332 19,652 53,984 (20,020) (6,894) (13,126) (36) $(13,162) $ $ (5.11) (5.11) $39,175 14,977 (98) — 7,741 61,795 32,367 16,928 49,295 12,500 3,405 9,095 (688) $ 8,407 $ $ 3.22 3.21

$21,735 6,728 (6,081) (5,565) 3,116 19,933 18,450 10,239 28,689 (8,756) (3,357) (5,399) 42 $ (5,357) $ (2.06) $ (2.06) $ 0.220 2,605 2,605

$19,533 7,853 (28) — 3,792 31,150 16,221 8,601 24,822 6,328 1,679 4,649 (372) $ 4,277 $ $ 1.64 1.64

$ 0.200 2,602 2,613

$ 0.420 2,575 2,575

$ 0.365 2,607 2,621

3

BOG-- FOIA 10-251 --000552

American International Group, Inc. and Subsidiaries

Segment Results
The following table summarizes the operations of each principal segment: (See also Note 2 to Consolidated Financial Statements.)
Operating Segments
(in millions)

Three Months Ended June 30, 2008 2007 $ 12,757 10,161 (3,605) 797 208 (385) $ 19,933 827 (2,401) (5,905) (314) (715) (248) $ (8,756) $ $12,928 14,023 2,123 1,781 263 32 $31,150 $ 2,976 2,620 47 927 (460) 218 $ 6,328

Percentage Increase/ (Decrease)

Six Months Ended June 30, 2008 2007 $25,831 27,705 4,324 3,450 394 91 $61,795 $ 6,072 4,901 339 1,685 (930) 433 $12,500

Percentage Increase/ (Decrease) (3)% (32) — (81) (80) — (45)% (64)% — — — — — —%

Total revenues(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total Operating income (loss)(a): General Insurance Life Insurance & Retirement Services(b) Financial Services(c)(d) Asset Management(e) Other Consolidation and eliminations Total

(1)% $ 25,046 (28) 18,913 — (10,165) (55) 648 (21) 80 — (558) (36)% $ 33,964 (72)% $ 2,164 — (4,232) — (14,677) — (1,565) — (1,483) — (227) — $(20,020)

(a) Includes other-than-temporary impairment charges of $6.8 billion and $417 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $12.4 billion and $884 million for the six-month periods ended June 30, 2008 and 2007, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS No. 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ (FAS 133), including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $272 million and $(430) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(476) million and $(882) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (b) Includes other-than-temporary impairment charges of $5.2 billion and $324 million for the three-month periods ended June 30, 2008 and 2007, respectively, and $9.6 billion and $716 million for the six-month periods ended June 30, 2008 and 2007, respectively. (c) Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For the three-month periods ended June 30, 2008 and 2007, the effect was $5 million and $(443) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(199) million and $(603) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. (d) For the three- and six-month periods ended June 30, 2008, both revenues and operating income (loss) include unrealized market valuation losses of BOG-- FOIA 10-251 --000553 $5.6 billion and $14.7 billion, respectively, on AIGFP’s super senior credit default swap portfolio. (e) Includes net realized capital losses of $464 million and $1.9 billion for the three- and six-month periods ended June 30, 2008, respectively, including otherthan-temporary impairment charges of $882 million and $1.9 billion, respectively.

From: To: Subject: Date:

William R Nelson Michael S Gibson Re: Fw: aig slightly revised 09/15/2008 09:19 AM

no. but brian may have. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD

Re: Fw: aig slightly revised

09/15/2008 09:17 AM

Have you heard anything new from NY? ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To

09/15/2008 09:02 AM cc Subject

William B English/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD Fw: aig slightly revised

Duplicate

BOG-- FOIA 10-251 --000554

From: To: Cc: Subject: Date:

Alejandro LaTorre Gustavo A Suarez Daniel M Covitz; Gustavo A Suarez; JNellie Liang Re: AIG commercial paper outstandings 09/15/2008 09:19 AM

Thanks for this. Info on maturity profile would be valuable too if available. Also we (b) (5) would like to get similar info for Thanks again for the quick turnaround. ▼ Gustavo A Suarez/BOARD/FRS@BOARD
Gustavo A Suarez/BOARD/FRS@BOARD

To cc

Alejandro LaTorre/NY/FRS@FRS Daniel M Covitz/BOARD/FRS@BOARD, JNellie Liang/BOARD/FRS@BOARD, Gustavo A Suarez/BOARD/FRS@BOARD Re: AIG commercial paper outstandings

09/15/2008 09:11 AM Subject

Alejandro, Please find attached some data on unsecured commercial paper outstanding and yields for AIG Funding Inc. AIG also sponsors two ABCP programs, and an affiliate of AIG sponsored an SIV not included in the file. The two ABCP programs and the SIV combine for less commercial paper outstanding than AIG itself. We will try to get more info about these last three programs over the course of the morning. As previously, this message and the data attached are internal FR - confidential. Please make sure to encrypt if forwarding is necessary.

▼ Alejandro LaTorre/NY/FRS@FRS
Alejandro LaTorre/NY/FRS@FRS

To cc

JNellie Liang/BOARD/FRS@BOARD Daniel M Covitz/BOARD/FRS@BOARD, Gustavo A Suarez/BOARD/FRS@BOARD, JNellie Liang/BOARD/FRS@BOARD Re: AIG commercial paper outstandings

09/14/2008 09:26 PM Subject

Duplicate

BOG-- FOIA 10-251 --000555

From: To: Cc: Subject: Date:

Diane Fraser@frb gov Elise.Liebers@ny.frb.org; Bart.S mon@bos.frb.org; Cynthia.L.Martin@bos.frb.org; Cynthia.L.Bordelon@chi.frb.org Diane.Fraser@frb.gov AIG shares drop n premarket trading 09/15/2008 09:31 AM

Business Insurance

AIG shares drop in premarket trading Sept 15, 2008 NEW YORK (Reuters)—Shares of American International Group Inc fell nearly 40% in premarket trading after reports that the insurer had turned to the Federal Reserve for $40 billion in bridge financing to ward off a liquidity crisis and ratings downgrades The up-front cost of insuring $10 million of AIG's debt for five years jumped to $3 05 million from $1 3 million on Friday, in addition to annual payments of $500,000, according to Markit Intraday The insurer, which has incurred $18 billion in losses over the past three quarters from guarantees it wrote on mortgage derivatives, was hit on Friday by Standard & Poor's putting the company's credit ratings on negative watch, indicating a possible downgrade Over the weekend, AIG executives and New York state insurance regulators scrambled to hatch a plan that would boost AIG's liquidity It was not clear early on Monday when AIG would reach a plan A spokesman did not immediately return a call seeking comment AIG shares have fallen about 80% since the start of the year Several analysts, in research reports on Monday, warned that the company is unlikely to resemble itself after a much-anticipated restructuring AIG has been considering "a wide range of options," the company said, including selling off valuable assets AIG, until recently the world's largest insurer, does business in 130 countries and territories around the world, selling insurance to 74 million customers worldwide It has also an aircraft leasing arm, an asset management business and a financial products unit The latter holds a credit default swap portfolio that has triggered the large mortgage losses AIG shares were down $4 46, or 36 7%, at $7 68 in premarket trade They reached a 52-week high of $70 13 on Oct 9, 2007 Copyright 2008 Reuters Limited. Click for restrictions.

BOG-- FOIA 10-251 --000556

From: To: Cc: Subject: Date:

Cynthia.L.Martin@bos.frb.org Diane.Fraser@frb.gov Bart.Simon@bos.frb.org; Cynthia.L.Bordelon@chi.frb.org; Diane.Fraser@frb.gov; Elise.Liebers@ny.frb.org Re: AIG shares drop in premarket trading 09/15/2008 10:04 AM

On the news just now - AIG to announce its restructuring plan this morning.

Cynthia Martin Federal Reserve Bank of Boston 600 Atlantic Avenue Boston, MA 02210 617 973-3178 (office) 617 619-8478 (fax)

BOG-- FOIA 10-251 --000557

From: To: Subject: Date:

William R Nelson Patricia Mosser Any news on an aig deal? 09/15/2008 10:11 AM

Email: william.r.nelson@frb.gov Office: 202-452-3579 Mobile: 202-725-3612

BOG-- FOIA 10-251 --000558

From: To: Subject: Date:

Jon D Greenlee Sabeth I Siddique; James Embersit; Nina Nichols; Adrienne Haden Fw: DB Clearing & Settlement update #2 09/15/2008 10:11 AM

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
John Harvey/NY/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 10:10 AM -----

To cc Subject

NY Bank Sup - LFI CPC Updates@FRS Christopher Hunter/NY/FRS@FRS DB Clearing & Settlement update #2

09/15/2008 09:30 AM

Please note the following update from Tom Devine, Director – Global Markets at 8:45 am.
Not Responsive

AIG
(b)(4) & (b)(8) Not Responsive

BOG-- FOIA 10-251 --000559

From: To: Subject: Date:

Jon D Greenlee Deborah P Bailey; Betsy Cross; Sabeth I Siddique; James Embersit; Adrienne Haden; Nina Nichols Fw: counterparty discussion. 09/15/2008 10:22 AM

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Richard Westerkamp/RICH/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 10:22 AM -----

To

09/15/2008 10:17 AM

Barbara Yelcich/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Deborah Lohnau/NY/FRS@FRS, James Wall/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS, Jennifer Burns/RICH/FRS@FRS, John Harvey/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Karen Kahrs/NY/FRS@FRS, Lisa A White/RICH/FRS@FRS, Lisa Joniaux/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS, Raymond A Bacon/BSR/CHI/FRS@FRS, Richard Westerkamp/RICH/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stanley Poszywak/RICH/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Theresa Barry/BOS/FRS@FRS, Todd Waszkelewicz/NY/FRS@FRS, Wendy E Kallery/BSR/CHI/FRS@FRS, Philip Aquilino/SF/FRS@FRS Jennifer.Burns@rich.frb.org, Mac Alfriend/RICH/FRS@FRS, Ryan Rehorn/RICH/FRS@FRS, Warren Morris/RICH/FRS@FRS, Stanley Poszywak/RICH/FRS@FRS, Elizabeth Gress/RICH/FRS@FRS, Ron Fox/RICH/FRS@FRS, Gregory H Feldberg/BOARD/FRS@BOARD counterparty discussion.

cc

Subject

BOG-- FOIA 10-251 --000560

Date: To: From: Subject:

DATE \@ "MMMM d, yyyy" September 15, 2008 Files Ryan Rehorn Wachovia Counterparty Call, 7:00 am on Lehman, WaMu, AIG, ML
(b)(4) & (b)(8)

Not Responsive (b)(4) & (b)(8) Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000561

Not Responsive

BOG-- FOIA 10-251 --000562

Not Responsive

BOG-- FOIA 10-251 --000563

From: To: Subject: Date: Attachments:

Jon D Greenlee Sabeth I Siddique; Adrienne Haden; James Embersit; Nina Nichols; Deborah P Bailey Fw: BAC - Counterparty Credit Update - Restricted FR (highly sensitive) 09/15/2008 10:26 AM AIG 080912 xls

Not Responsive

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Brad Evans/RICH/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 10:25 AM -----

To

09/15/2008 10:22 AM

Barbara Yelcich/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Deborah Lohnau/NY/FRS@FRS, James Wall/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS, Jennifer Burns/RICH/FRS@FRS, John Harvey/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Karen Kahrs/NY/FRS@FRS, Lisa A White/RICH/FRS@FRS, Lisa Joniaux/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS, Philip Aquilino/SF/FRS@FRS, Raymond A Bacon/BSR/CHI/FRS@FRS, Richard Westerkamp/RICH/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stanley Poszywak/RICH/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Theresa Barry/BOS/FRS@FRS, Todd Waszkelewicz/NY/FRS@FRS, Wendy E Kallery/BSR/CHI/FRS@FRS Jennifer Burns/RICH/FRS@FRS, Lisa A White/RICH/FRS@FRS, Karen Craigmile/RICH/FRS@FRS, Frank Mayhew/RICH/FRS@FRS, Kerri Firestone/RICH/FRS@FRS, Alan Michael, Jodie Goff/RICH/FRS@FRS, David Schwartz/RICH/FRS@FRS, Christopher Cook/RICH/FRS@FRS, Stacy L Coleman/RICH/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS, Mac Alfriend/RICH/FRS@FRS BAC - Counterparty Credit Update - Restricted FR (highly sensitive)

cc

Subject

Please find attached BAC's tear sheet data for "heightened monitoring" counterparty (b)(4) & (b)(8) exposures.

BOG-- FOIA 10-251 --000564

(b)(4) & (b)(8)

Not Responsive

Not Responsive

Best Regards, Brad Evans & Kerri Firestone Federal Reserve "There cannot be a crisis next week. My schedule is already full." Henry Kissinger

BOG-- FOIA 10-251 --000565

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000566

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000567

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000568

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000569

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000570

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000571

BOG-- FOIA 10-251 --000572

BOG-- FOIA 10-251 --000573

BOG-- FOIA 10-251 --000574

BOG-- FOIA 10-251 --000575

Not Responsive

BOG-- FOIA 10-251 --000576

Not Responsive

BOG-- FOIA 10-251 --000577

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000578

Not Responsive

BOG-- FOIA 10-251 --000579

Not Responsive

BOG-- FOIA 10-251 --000580

Not Responsive

BOG-- FOIA 10-251 --000581

BOG-- FOIA 10-251 --000582

BOG-- FOIA 10-251 --000583

Not Responsive

BOG-- FOIA 10-251 --000584

(

Not Responsive

BOG-- FOIA 10-251 --000585

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000586

Not Responsive

BOG-- FOIA 10-251 --000587

Not Responsive

BOG-- FOIA 10-251 --000588

Not Responsive

BOG-- FOIA 10-251 --000589

Not Responsive

BOG-- FOIA 10-251 --000590

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000591

Not Responsive

BOG-- FOIA 10-251 --000592

BOG-- FOIA 10-251 --000593

BOG-- FOIA 10-251 --000594

BOG-- FOIA 10-251 --000595

BOG-- FOIA 10-251 --000596

Not Responsive

BOG-- FOIA 10-251 --000597

Not Responsive

BOG-- FOIA 10-251 --000598

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000599

Not Responsive

BOG-- FOIA 10-251 --000600

Not Responsive

BOG-- FOIA 10-251 --000601

Not Responsive

BOG-- FOIA 10-251 --000602

BOG-- FOIA 10-251 --000603

BOG-- FOIA 10-251 --000604

BOG-- FOIA 10-251 --000605

Not Responsive

BOG-- FOIA 10-251 --000606

Not Responsive

BOG-- FOIA 10-251 --000607

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000608

Not Responsive

BOG-- FOIA 10-251 --000609

Not Responsive

BOG-- FOIA 10-251 --000610

F om To Subject Date

Wi l am R Nelson at ic a Mos e Re Any news on an a g deal? 09/15/2008 10 31 AM

Thanks. Ema l william.r.nelson@frb.go Office 202- 52-3579 Mobile 202-725-3612

From Patric a.Mosser Sent 09 15/2008 10 26 AM AST To William Nelson Cc Ale andro LaTorre Subject Re Any news on an a g deal? Not yet. But they have prom sed announcements before and then not had anything to report.... We ll keep you posted. Also let you know if we have another ca l with them. Frankly things have been in such a state of flux that they don t seem to have much to report.

Wi liam R.Nelson@frb.gov o 09 5 2008 0 4 AM cc Sub ect Any news on an aig deal? " at c a Mosse " < at icia Mosse @ny b o g>

Email Office Mobile

william r nelson@frb gov 202-452-3579 202-725-3612

BOG-- FOIA 10-251 --000611

From: To: Subject: Date: Importance:

Kim Jensik Adrienne Haden; Nina Nichols; Sabeth I Siddique 10:30 call info 09/15/2008 10:41 AM High

As per Dianne Dobbeck: A conf. call meeting to discuss AIG & knock-on to other institutions has been scheduled for today: Date: Sept. 15, 2008 Time: 10:30am Location: 25th Floor Southeast Conf. Call. Teleconference info: Dial: 877 810 9415 Participant: 4169466 Host: 2975

Senior Staff Assistant BS&R Div, Federal Reserve Board Phone: 202/736-5555 Fax: 202/452-2770

BOG-- FOIA 10-251 --000612

From: To: Subject: Date:

Calvin Mitchell Michelle A Smith Re: 09/15/2008 10:47 AM

When you're done. At 11:30 am, we're hosting, along with NYS insurance superintendent and TRS reps (no Paulson), a group to discuss the situation re AIG. At the request of AIG and an industry consortium, we are providing premises to discuss their situation. TFG said I can confirm on background once underway.

----- Original Message ----From: Michelle A Smith Sent: 09/15/2008 10:38 AM EDT To: Calvin Mitchell Subject: Re:

We're in our board mtg. Shd I step out?

----- Original Message ----From: Calvin.Mitchell Sent: 09/15/2008 10:40 AM AST To: Michelle Smith

Call me in TFG's office please. Thx.

BOG-- FOIA 10-251 --000613

From: To: Subject: Date:

Michelle A Smith Donald L Kohn; Kevin Warsh; Brian F Madigan; Scott Alvarez (b) (6) AIG mtg at FRBNY 09/15/2008 10:50 AM

----- Original Message ----From: Calvin Mitchell Sent: 09/15/2008 10:50 AM EDT To: Michelle Smith Subject: Re:

When you're done. At 11:30 am, we're hosting, along with NYS insurance superintendent and TRS reps (no Paulson), a group to discuss the situation re AIG. At the request of AIG and an industry consortium, we are providing premises to discuss their situation. TFG said I can confirm on background once underway.

Duplicate

BOG-- FOIA 10-251 --000614

From: To: Cc: Subject: Date:

Coryann Stefansson Diann Townsend; Kwayne Jennings Ron Feldman Re: AIG and Wamu 09/15/2008 11:01 AM

(b)(4) & (b)(8)

Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # 202 294 9829 ▼ Diann Townsend ----- Original Message ----From: Diann Townsend Sent: 09/15/2008 09:58 AM CDT To: Coryann Stefansson; Kwayne Jennings Cc: Ron Feldman Subject: AIG and Wamu (b)(4) & (b)(8)

(

Please let me know if you'd like any additional information. Diann Townsend Supervision, Regulation, and Credit Federal Reserve Bank of Minneapolis 612-204-6130

BOG-- FOIA 10-251 --000615

From: To: Subject: Date:

Kevin Warsh Patrick Parkinson Fw: AIG mtg at FRBNY 09/15/2008 11:02 AM

May be goof for u to attend --------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Michelle A Smith Sent 0:50 AM EDT (b) (6) To: Donald Kohn; Kevin Warsh; Brian Madigan; Scott Alvarez Subj t FRBNY

----- Original Message ----From: Calvin Mitchell Sent: 09/15/2008 10:50 AM EDT To: Michelle Smith Subject: Re:

When you're done. At 11:30 am, we're hosting, along with NYS insurance superintendent and TRS reps (no Paulson), a group to discuss the situation re AIG. At the request of AIG and an industry consortium, we are providing premises to discuss their situation. TFG said I can confirm on background once underway.

Duplicate

BOG-- FOIA 10-251 --000616

From: To: Subject: Date:

Patrick M Parkinson Kevin Warsh Re: AIG mtg at FRBNY 09/15/2008 11:05 AM

I haven't been invited and will lay low. Pat

----- Original Message ----From: Kevin.Warsh Sent: 09/15/2008 11:02 AM AST To: Patrick Parkinson Subject: Fw: AIG mtg at FRBNY

May be goof for u to attend --------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Michelle A Smith Sent 0:50 AM EDT (b) (6) To: Donald Kohn; Kevin Warsh; Brian Madigan; Scott Alvarez Subj t FRBNY

----- Original Message ----From: Calvin Mitchell Sent: 09/15/2008 10:50 AM EDT To: Michelle Smith Subject: Re:

When you're done. At 11:30 am, we're hosting, along with NYS insurance superintendent and TRS reps (no Paulson), a group to discuss the situation re AIG. At the request of AIG and an industry consortium, we are providing premises to discuss their situation. TFG said I can confirm on background once underway.

----- Original Message ----From: Michelle A Smith Sent: 09/15/2008 10:38 AM EDT To: Calvin Mitchell Subject: Re:

We're in our board mtg. Shd I step out?

----- Original Message ----From: Calvin.Mitchell Sent: 09/15/2008 10:40 AM AST
BOG-- FOIA 10-251 --000617

From: To: Cc: Subject: Date: Attachments:

Meredith J Beechey MA FMA Eventstudy Steve A Sharpe Early reaction to the weekend's events 09/15/2008 11:07 AM earlytable.pdf

Attached is a table summarizing the market reaction between close of business Friday and open on Monday to the weekend's events, including: - Lehman's bankruptcy, the purchase of Merril Lynch by Bank of America, and reported difficulties at AIG, - the announcement on Sunday of enhancements of the Federal Reserve's liquidity facilities, and - a joint statement by a consortium of major banks creating a liquidity pool for participant borrowing. Rates on interest rate futures declined sharply at all maturities and nominal Treasury yields were also sharply lower. The two year yield was down 38 basis points, the ten-year down 20 basis points. Equity futures were down about 4 percent. Another table will be distributed later in the day. Meredith Beechey

BOG-- FOIA 10-251 --000618

Market Reaction to Announcement of September 14, 2008 Enhancement to Liquidity Facilities

Friday 5-Sep-2008 5:00 PM (1)

Monday 15-Sep-08 08:05 AM (2)

Early Change (2)-(1)

Treasury Coupon Yields Two-Year 2.22 Five-Year 2.95 Ten-Year 3.72 Equity Prices S&P 500* S&P Futures TIPS Five-Year Ten-Year Fed Funds Futures Oct Nov Dec Jan Eurodollar Futures S-08 D-08 M-09 J-09 S-09

1.84 2.63 3.52

basis points -37.5 -32.3 -19.5 percent change -1.0 -3.9 basis points -16.4 -12.0 basis points -16.5 -17.5 -22.0 -25.0 basis points -0.1 -23.5 -32.5 -34.5 -34.0 basis points 18.73 18.80 32.16

1251.7 1258.5

1239.7 1209.7

1.46 1.77

1.29 1.65

1.97 1.93 1.91 1.92

1.81 1.75 1.69 1.67

2.82 2.93 2.82 2.92 3.08

2.82 2.70 2.49 2.57 2.74

Libor OIS Spreads One-month 53.09 Three-Month 86.33 Six-Month 105.43 CDS* iTraxx (Europe) CDX (US) F/X Quotes Yen/Dollar Dollar/Euro

71.81 105.13 137.59

102.86 151.69

basis points 130.22 27.36 NA NA percent change -2.1 -0.6

107.9870 1.4209

105.6820 1.4126

* Mkt open 9:30am ** Observation at 9:15am
BOG-- FOIA 10-251 --000619

From: To: Subject: Date:

Krishna.Guha@FT.com Michelle.A.Smith@frb.gov Re: trying to reach you... (sorry) 09/15/2008 11:13 AM

i really don't think you're going to be able to help me at all. but for what its worth... i am writing a piece saying the Fed will likely seek maximum flexibility to respond to the fast-evolving financial crisis in the first instance, rather than cut rates immediately. i know you can't comment on this. i just wanted to let you know anyway. seperately, kevin sounded sceptical on extending credit to AIG - i wondered if this was the result of being exhausted after a mad weekend or a fair reflection of the stance at this juncture. K

Michelle.A.Smith@ frb.gov To 09/15/2008 11:08 AM

"Krishna Guha" <Krishna.Guha@FT.com> cc Subject Re: trying to reach you... (sorry)

Am in our board mtg. Want to talk by email?

----- Original Message ----From: Krishna.Guha Sent: 09/15/2008 11:09 AM AST To: Michelle Smith Subject: trying to reach you... (sorry)

********************************************************************************** This email may contain confidential material. If you were not an intended recipient, please notify the sender and delete all copies. We may monitor email to and from our network.

BOG-- FOIA 10-251 --000620

This email was sent by a company within the FT Group. The Financial Times Limited, registered in England and Wales number 227590. Registered office: Number One Southwark Bridge, London SE1 9HL. VAT: GB 278 5371 21. The Financial Times (HK) Limited, registered in Hong Kong number 108204. Registered office: Unit 5905-5912, 59/F The Center, No.99 Queen’s Road Central, Hong Kong. FT Publications Inc, incorporated in New York, number 13-2545828. Registered Office: 1330 Avenue of the Americas, New York, NY 10019, USA.

********************************************************************************** This email may contain confidential material. If you were not an intended recipient, please notify the sender and delete all copies. We may monitor email to and from our network. This email was sent by a company within the FT Group. The Financial Times Limited, registered in England and Wales number 227590. Registered office: Number One Southwark Bridge, London SE1 9HL. VAT: GB 278 5371 21. The Financial Times (HK) Limited, registered in Hong Kong number 108204. Registered office: Unit 5905-5912, 59/F The Center, No.99 Queen’s Road Central, Hong Kong. FT Publications Inc, incorporated in New York, number 13-2545828. Registered Office: 1330 Avenue of the Americas, New York, NY 10019, USA.

BOG-- FOIA 10-251 --000621

From: To:

Cc:

Subject: Date: Importance:

Thomas J O'Keeffe Alejandro LaTorre; Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Gorzkowski; Barbara Yelcich; Bard Stermasi; Brandon Hall; Brian Peters; Caren Cox; Caroline Frawley; Caroline Nuffort; Catherine A Tilford; Catherine Voigts; Chris Haley; Chris McCurdy; Christina Zausner; Christopher Calabia; Christopher Powell; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Daniel Sullivan; Deborah Lohnau; Deborah P Bailey; Denise Goodstein; Dennis Herbst; Dennis Ryan; Dianne Dobbeck; Dmitry J Gershik; Elizabeth Gress; Elizabeth Tafone; Gail Santora; Genevievette.E.Walker@frb.gov; Gerard Dages; Glen Reppy; Gretchen Cappiello; Gretchen Walker; H Clay Saylor; Hasan Latif; Hayley Boesky; Homer Hill; Isabella Lo Piccolo; Jack Jennings; James Embersit; James Hodgetts; James Wall; Jan Voigts; Jane Green; Jane Majeski; Jane Wakefield; Jeanmarie Davis; Jeffrey Kowalak; Jeffrey Levine; Jeffrey Plaskett; Jim Mahoney; Joanna Wisniecka; John Beebe; John Heinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kerry STREETS; Kevin Clarke; Kevin Coffey; Kevin Lee; Kevin Littler; Kirsten Harlow; Kyle Grieser; Lance Auer; Larry Bonnemere; Laura A Macedo; Lawrence ROSTOKER; Laxmi Rao; Lily Tham; Linda Rodriguez; Lisa A White; Lisa Joniaux; Lucinda M Brickler; Lydia Tshulos; Mark Scapp; Meg McConnell; Meinrad Danzer; Michael Johnson; Myron L Kwast; Bin Lang; Brian Hefferle; Caroline Nuffort; Isabella Lo Piccolo; Joanna Wisniecka; Joshua Sherwin; Kathryn Chen; Kenton Beerman; Mayra Gonzalez; Randolph Brown; Susan G Ballinger; Susan Goldberg; Thomas J O'Keeffe; Pamela S Powell; Pat Soriano; Patrick M Parkinson; Patrick Roche; Philip Aquilino; Ralph Santasiero; Randolph Brown; Renuka Vijayanathan; Richard Heeseler; Richard Kunen; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; Robert D Patalano; Robert Gutierrez; Roberto Perli; Roger Graham; Rohit Bansal; Ron Fox; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; Stacy.L.Coleman@rich.frb.org; Stanley Poszywak; Stephanie Chaly; Steven Friedman; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Terrence Checki; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas Dolan; Thomas J O'Keeffe; Tim.P.Clark@frb.gov; Todd Waszkelewicz; Wendy Ng; William B English; William BRODOWS; William Rutledge; Wing Oon Bin Lang; Brian Hefferle; Caroline Nuffort; Isabella Lo Piccolo; Joanna Wisniecka; Joshua Sherwin; Kathryn Chen; Kenton Beerman; Mayra Gonzalez; Randolph Brown; Susan G Ballinger; Susan Goldberg; Thomas J O'Keeffe AM Liquidity Update 09/15/2008 11:25 AM High

Restricted F.R. AM Liquidity Team Update:
(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000622

(b)(4) & (b)(8)

************************************************ Thomas J. O'Keeffe, CFA Bank Supervision Federal Reserve Bank of New York (212)720-5568 ***********************************************

BOG-- FOIA 10-251 --000623

From: To: Cc: Subject: Date:

Jon D Greenlee William R Nelson Michael S Gibson; Roberto Perli; William B English Re: Fw: aig slightly revised 09/15/2008 11:27 AM

Let me know how we may help. Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To

09/15/2008 09:02 AM cc Subject

William B English/BOARD/FRS@BOARD, Roberto Perli/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD Fw: aig slightly revised

Duplicate

BOG-- FOIA 10-251 --000624

From: To: Subject: Date:

Scott Alvarez William R Nelson Re: Fw: aig slightly revised 09/15/2008 11:36 AM

Bill,
(b) (5)

Scott ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Scott Alvarez/BOARD/FRS@BOARD Fw: aig slightly revised

09/15/2008 09:01 AM

Duplicate

BOG-- FOIA 10-251 --000625

From: To: Subject: Date: Attachments:

Michael S Gibson Gustavo A Suarez AIG corporate structure 09/15/2008 12:14 PM aig-corporate-structure.pdf

BOG-- FOIA 10-251 --000626

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...

(b) (4)

BOG-- FOIA 10-251 --000627

1 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000628

2 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000629

3 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000630

4 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000631

5 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000632

6 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000633

7 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

BOG-- FOIA 10-251 --000634

8 of 9

9/15/2008 12:13 PM

SNL Interactive: Briefing Book: Corporate Structure

http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...
(b) (4)

Site content and design Copyright © 2008, SNL Financial LC Usage of this product is governed by the Master Subscription Agreement. SNL Financial LC, One SNL Plaza, PO Box 2124, Charlottesville, Virginia 22902, (434) 977-1600

BOG-- FOIA 10-251 --000635

9 of 9

9/15/2008 12:13 PM

From: To: Cc: Subject: Date:

Jill K Cetina RBOPS PAYMENT SYSTEM RISK; RBOPS CSS Donald Hammond; Gregory L Evans Fw: WSJ.com - AIG Scrambles to Raise Cash, Talks to Fed 09/15/2008 12:14 PM

Note that AIG is reported to have some VERY large CDS positions -- with European banks as counterparties.
----- Forwarded by Jill K Cetina/BOARD/FRS on 09/15/2008 12:06 PM ----cetina@verizon.net To 09/15/2008 12:05 PM cc Subject WSJ.com - AIG Scrambles to Raise Cash, Talks to Fed jill.k.cetina@frb.gov

Powered by

* Please note, the sender's email address has not been verified.

You have received the following link from cetina@verizon.net:

Click the following to access the sent link:

WSJ.com - AIG Scrambles to Raise Cash, Talks to Fed * This article will be available to non -subscribers of the Online Journal for up to seven days after it is e-mailed.

BOG-- FOIA 10-251 --000636

Get your EMAIL THIS Browser Button and use it to email content from any Web site. Click here for more information.

*This article can also be accessed if you copy and paste the entire address below into your web browser. http://online.wsj.com/wsjgate ?subURI=%2Farticle%2FSB122148503202636197 -email.html&nonsubURI=%2Farticle_email%2FSB122148503202636197 lMyQjAxMDI4MjExNTQxODU1Wj.html

BOG-- FOIA 10-251 --000637

From: To: Subject: Date:

(b)(4) &
patrick.e.mccabe@frb.gov You are probably busy, but.... 09/15/2008 12:18 PM

You said the last time we spoke to touch base if I ever have concerns... The lack of Money funds markdown to Market talk a resolution on AIG keeps markets unsettled. (fortunately not us) could see their NAVs at risk due to the zero of their Lehman holdings. about who is next.

You probably can't say...but are you hearing of any money funds in distress due to their holdings, or ancillary price pressures? My opinion is that the Fed should be considering "emergency easing" if for no other reason to alleviate pricing in the money markets and more specifically to protect from potential "breaking the buck" on the part of some money funds out there. The Fed could cut rates and wrap "emergency" and "temporary" language around the move to communicate that such a move is designed to give markets a chance to catch its breath. Just my thoughts.

(b) (6)

(b) (4)

BOG-- FOIA 10-251 --000638

From: To: Cc: Subject: Date: Attachments:

Diane Fraser Sabeth I Siddique; James Embersit; Nina Nichols Barbara Cornyn; Diane.Fraser@frb.gov; Donald N Gabbai; David K Lynch; Craig F Marchbanks Fw: Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIG 09/15/2008 12:21 PM Notes from conf. call with NYSID Sup. Dinallo re AIG (9-14-08).doc

FYI.

----- Forwarded by Diane Fraser/BOARD/FRS on 09/15/2008 12:19 PM ----Diane.Fraser@frb.gov To 09/14/2008 10:09 PM cc Subject Jon.D.Greenlee@frb.gov Adrienne.Haden@frb.gov, Diane.Fraser@frb.gov Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIG

Jon, Per your request. Please distribute to others who may find these notes useful. Diane

BOG-- FOIA 10-251 --000639

RESTRICTED FR Conference Call with Eric Dinallo, Superintendent New York State Insurance Department (NYSID) Regarding the Financial Condition of American International Group, Inc. (AIG) September 14, 2008
(b)(4), (b)(5), & (b)(8)

1

BOG-- FOIA 10-251 --000640

RESTRICTED FR
(b)(4), (b)(5), & (b)(8)

2

BOG-- FOIA 10-251 --000641

RESTRICTED FR
(b)(4), (b)(5), & (b)(8)

3

BOG-- FOIA 10-251 --000642

RESTRICTED FR
(b)(4), (b)(5), & (b)(8)

4

BOG-- FOIA 10-251 --000643

From: To: Cc:

Subject: Date:

Antonio Alvarez NY Bank Sup - LFI CPC Updates William Hilton; Louis Braunstein; William Hallacy; Glen Snajder; Rinku Shah; John Ruocco; Eric Breitweiser; Anne Chiou; Sara Mahmoud; Jacqueline Lovisa; Sola Majolagbe; Glen Reppy; Katheryn Van der Celen; Calvin Bailey; Timothy Sheridan; Christina Zausner; Steven J Manzari Citi Counterparty Update 9-15-08 AM 09/15/2008 12:25 PM

Mid Morning Discussions Tom Fontana, FIs Risk Management), and OCC.
Not Responsive

AIG Exposure
(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000644

(b)(4) & (b)(8)

We expect to get Wachovia exposure during our next update later in the day/ evening. Regards, ---------------------------------------------------Antonio Alvarez Credit Risk Coordinator - Wholesale Citigroup Continuous Monitoring Team Federal Reserve Bank of New York Citigroup On-site: (212) 527-1255; FRBNY Voicemail: (212) 720-5069 Blackberry: (718) 612-3095

BOG-- FOIA 10-251 --000645

From: To: Subject: Date: Attachments:

Nina Nichols Karen L El Kochta Fw: Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIG 09/15/2008 12:26 PM Notes from conf. call with NYSID Sup. Dinallo re AIG (9-14-08).doc

----- Forwarded by Nina Nichols/BOARD/FRS on 09/15/2008 12:25 PM ----Diane Fraser/BOARD/FRS

To

09/15/2008 12:21 PM

Sabeth I Siddique/BOARD/FRS@BOARD, James Embersit/BOARD/FRS@BOARD, Nina Nichols/BOARD/FRS Barbara Cornyn/BOARD/FRS@BOARD, Diane.Fraser@frb.gov, Donald N Gabbai/BOARD/FRS@BOARD, David K Lynch/BOARD/FRS@BOARD, Craig F Marchbanks/BOARD/FRS@BOARD Fw: Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIG

cc

Subject

FYI.

----- Forwarded by Diane Fraser/BOARD/FRS on 09/15/2008 12:19 PM ----Diane.Fraser@frb.gov To 09/14/2008 10:09 PM cc Subject Jon.D.Greenlee@frb.gov Adrienne.Haden@frb.gov, Diane.Fraser@frb.gov Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIG

Duplicate

BOG-- FOIA 10-251 --000646

From: To: Cc: Subject: Date: Attachments:

Deborah P Bailey Donald L Kohn; Randall S Kroszner; Elizabeth A Duke Roger.Cole@frb.gov; Coryann Stefansson; Jack Jennings; Jon D Greenlee; Jeffrey Marquardt; Jeff Stehm; Brian F Madigan; Norah Barger Fw: MARKETS, HOURLY UPDATE, Monday 15 September 2008, 16.30 MEAT attached 09/15/2008 12:30 PM MEAT 15 September 2008 1630.pdf

FYI. Update from the UK. We have multiple information streams underway. If you find this helpful to pass on to others not on the list, please pass it on or let me know and i will. Thanks
----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/15/2008 12:22 PM ----William.Rutledge@ny.frb.org To 09/15/2008 12:21 PM cc Subject Fw: MARKETS, HOURLY UPDATE, Monday 15 September 2008, 16.30 MEAT attached christine.cumming@ny.frb.org, deborah.p.bailey@frb.gov, arthur.angulo@ny.frb.org, brian.peters@ny.frb.org, sarah.dahlgren@ny.frb.org, william.dudley@ny.frb.org, Thomas.Baxter@ny.frb.org, terrence.checki@ny.frb.org

FYI.
----- Forwarded by William Rutledge/NY/FRS on 09/15/2008 12:20 PM ----"Thomas Huertas" <Thomas.Huertas@fsa.gov.uk> To <William.Rutledge@ny.frb.org> 09/15/2008 12:21 PM cc <sirrie@sec.gov> Subject FW: MARKETS, HOURLY UPDATE, Monday 15 September 2008, 16.30 MEAT attached

FYI. -----Original Message----From: Cope, Philip [mailto:Philip.Cope@bankofengland.gsi.gov.uk] Sent: 15 September 2008 17:01 To: Market News; FSA & HMT Markets updates Subject: MARKETS, HOURLY UPDATE, Monday 15 September 2008, 16.30 MEAT attached Please find 16.30 MEAT attached. Many apologies for the delay. -----Original Message----From: Mallett, Martin Sent: Monday, September 15, 2008 4:55 PM To: Market News; FSA & HMT Markets updates
BOG-- FOIA 10-251 --000647

(b) (4)

BOG-- FOIA 10-251 --000648

(b) (4)

BOG-- FOIA 10-251 --000649

(b) (4)

BOG-- FOIA 10-251 --000650

This communication and any attachments contains information which is confidential and may be subject to legal privilege. It is for intended recipients only. If you are not the intended recipient you must not copy, distribute, publish, rely on or otherwise use it without our consent. Some of our communications may contain confidential information which it could be a criminal offence for you to disclose or use without authority. If you have received this email in error please notify postmaster@fsa.gov.uk immediately and delete the email from your computer. The FSA reserves the right to monitor all email communications for compliance with legal, regulatory and professional standards. This email is not intended to nor should it be taken to create any legal relations or contractual relationships. This email has originated from The Financial Services Authority (FSA) 25 The North Colonnade, Canary Wharf, London E14 5HS United Kingdom Registered as a Limited Company in England and Wales No.1920623. Registered Office as above Switchboard: 020 7066 1000 Web Site: http://www.fsa.gov.uk

BOG-- FOIA 10-251 --000651

*****************************************************************

BOG-- FOIA 10-251 --000652

(b) (4)

BOG-- FOIA 10-251 --000653

From: To: Subject: Date: Attachments:

Jon D Greenlee William B English; William R Nelson; Michael S Gibson Fw: UBS Counterparty call with D.Bawden - Notes 09/15/2008 12:34 PM LEH calls 9-15 - 10am cntrprty Minutes.doc

The color on AIG might provide some insights into how the market views the firm. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Paul H Austin/NY/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 12:33 PM -----

To

09/15/2008 12:31 PM

Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS, Andrew Small/NY/FRS@FRS, Anthony Cirillo/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS, Brandon Hall/NY/FRS@FRS, Brian Begalle/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Bridget Habib/NY/FRS@FRS, Caroline Nuffort/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, Christina Zausner/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS, Clinton Lively/NY/FRS@FRS, Corbin Long/NY/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Craig Leiby/NY/FRS@FRS, Daniel Muccia/NY/FRS@FRS, Deborah Lohnau/NY/FRS@FRS, Dexter Williams/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS, Homer Hill/NY/FRS@FRS, Isabella Lo Piccolo/NY/FRS@FRS, James Hodgetts/NY/FRS@FRS, Jan Voigts/NY/FRS@FRS, Jeanmarie Davis/NY/FRS@FRS, Jeffrey Levine/NY/FRS@FRS, Jennifer Burns/RICH/FRS@FRS, Jim Mahoney/NY/FRS@FRS, John Beebe/RICH/FRS@FRS, John Heinze/NY/FRS@FRS, John Ricketti/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Jonathan Polk/NY/FRS@FRS, Jordan Pollinger/NY/FRS@FRS, Joseph Galati/NY/FRS@FRS, Judith J Gruttman/NY/FRS@FRS, Kara Sulmasy/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS, Katheryn Van der Celen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS, Kevin Clarke/NY/FRS@FRS, Kevin Coffey/NY/FRS@FRS, Kevin Lee/NY/FRS@FRS, Kirsten Harlow/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS, Lance Auer/NY/FRS@FRS, Lawrence ROSTOKER/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS, Lucinda M Brickler/NY/FRS@FRS, Luis Uranga/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS, Paul Whynott/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS, Richard Kunen/NY/FRS@FRS, Richard McGee/NY/FRS@FRS, Robert Gutierrez/NY/FRS@FRS, Roger Graham/NY/FRS@FRS, Ronald Stroz/NY/FRS@FRS, Sandy Krieger/NY/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS, Theodore Lubke/NY/FRS@FRS, Theonilla LeeChan/NY/FRS@FRS, Thomas J O'Keeffe/NY/FRS@FRS, Tim P Clark/BOARD/FRS@BOARD, Todd
BOG-- FOIA 10-251 --000654

Waszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS, William BRODOWS/NY/FRS@FRS, William Hallacy/NY/FRS@FRS, Wing Oon/NY/FRS@FRS, Caroline Frawley/NY/FRS, John Reynolds/NY/FRS, Betsy Gordon/NY/FRS, Christopher Powell/NY/FRS, Catherine A Tilford/BOARD/FRS@BOARD, Paul Bhatti/NY/FRS, jordan.pollinger@ny.frb.org cc Subject UBS Counterparty call with D.Bawden - Notes

Regards, Paul Paul Austin Senior Bank Examiner Bank Supervision Federal Reserve Bank of New York Paul.H.Austin@ny.frb.org 212.720.6127 203.719.7327

BOG-- FOIA 10-251 --000655

(b)(4) & (b)(8)

Not Responsive

1
BOG-- FOIA 10-251 --000656

Not Responsive

2
BOG-- FOIA 10-251 --000657

From: To: Cc: Subject: Date:

John Reynolds William Hallacy; NY Bank Sup - LFI CPC Updates@FRS Caroline.Frawley@ny.frb.org; Steven.Manzari@ny.frb.org; Andrew Small; John Reynolds; Paul Bhatti; Christopher Powell; Betsy Gordon; Jordan Pollinger; Paul H Austin UBS follow-up -- Counterparty Monitoring 09/15/2008 12:35 PM

In our conversation with UBS folks in London around the time of London's opening UBS mentioned a few institutions that are concerned with.
(b)(4) & (b)(8)

AIG,

(b)(4) & (b)(8)

John Reynolds ▼ William Hallacy/NY/FRS
William Hallacy/NY/FRS

To

09/15/2008 12:01 PM

NY BankSup New York CPC, Antonio Alvarez/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS, Moses Cheng/NY/FRS@FRS, Kathleen Smalligan/NY/FRS@FRS, Yogesh Shah/NY/FRS@FRS, Carol Roller/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, John Ricketti/NY/FRS@FRS Steven Mirsky/NY/FRS@FRS, Dexter Williams/NY/FRS@FRS, Bridget Habib/NY/FRS@FRS, Jordan Pollinger/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS Counterparty Monitoring

cc

Subject

CPC Teams
(b) (8)

BOG-- FOIA 10-251 --000658

Thanks and keep up the good work -William Hallacy, CFA Federal Reserve Bank of New York Fed 212-720-2776 Citi 212-583-7104

BOG-- FOIA 10-251 --000659

From: To: Subject: Date:

Jon D Greenlee William B English; William R Nelson; Michael S Gibson Fw: Citi Counterparty Update 9-15-08 AM 09/15/2008 12:37 PM

More insight on AIG below. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Antonio Alvarez/NY/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 12:36 PM -----

To cc

NY Bank Sup - LFI CPC Updates William Hilton/NY/FRS@FRS, Louis Braunstein/NY/FRS@FRS, William Hallacy/NY/FRS@FRS, Glen Snajder/NY/FRS@FRS, Rinku Shah/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, Eric Breitweiser/NY/FRS@FRS, Anne Chiou/NY/FRS@FRS, Sara Mahmoud/NY/FRS@FRS, Jacqueline Lovisa/NY/FRS@FRS, Sola Majolagbe/NY/FRS@FRS, Glen Reppy/NY/FRS@FRS, Katheryn Van der Celen/NY/FRS@FRS, Calvin Bailey/NY/FRS@FRS, Timothy Sheridan/NY/FRS@FRS, Christina Zausner, Steven J Manzari/NY/FRS@FRS Citi Counterparty Update 9-15-08 AM

09/15/2008 12:25 PM

Subject

Mid Morning Discussions Tom Fontana, FIs Risk Management), and OCC.
Duplicate

BOG-- FOIA 10-251 --000660

From: To: Subject: Date:

Jon D Greenlee Sabeth I Siddique; James Embersit; Nina Nichols; Adrienne Haden Fw: UBS follow-up -- Counterparty Monitoring 09/15/2008 12:37 PM

fyi Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
John Reynolds/NY/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 12:37 PM -----

To cc

William Hallacy/NY/FRS@FRS, NY Bank Sup - LFI CPC Updates@FRS Caroline.Frawley@ny.frb.org, Steven.Manzari@ny.frb.org, Andrew Small/NY/FRS@FRS, John Reynolds/NY/FRS@FRS, Paul Bhatti/NY/FRS@FRS, Christopher Powell/NY/FRS, Betsy Gordon/NY/FRS@FRS, Jordan Pollinger/NY/FRS@FRS, Paul H Austin/NY/FRS@FRS UBS follow-up -- Counterparty Monitoring

09/15/2008 12:35 PM

Subject

In our conversation with UBS folks in London around the time of London's opening UBS mentioned a few institutions that are concerned with.
Duplicate

BOG-- FOIA 10-251 --000661

From: To: Subject: Date: Attachments:

Holly A Kirkpatrick Danielle E Little AIG 09/15/2008 12:50 PM AIG.xls

BOG-- FOIA 10-251 --000662

(b) (4)

BOG-- FOIA 10-251 --000663

From: To:

Cc: Subject: Date:

Moses Cheng Alexa Philo; Amy White; Anthony Cirillo; Arthur Angulo; Barbara Gorzkowski; Barbara Yelcich; Bard Stermasi; Brandon Hall; Brian Peters; Bridget Habib; Caren Cox; Caroline Frawley; Catherine A Tilford; Catherine Voigts; Chris Haley; Chris McCurdy; Christopher Calabia; Claudia Franco; Corbin Long; Coryann Stefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Denise Goodstein; Dennis Ryan; Dexter Williams; Diane Rose; Dianne Dobbeck; Genevievette.E.Walker@frb.gov; Gretchen Cappiello; H Clay Saylor; Helen Mucciolo; Homer Hill; Jack Jennings; James Hodgetts; James Wall; Jan Voigts; Jane Majeski; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Heinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Jyoti Kohli; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kevin Clarke; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Larry Bonnemere; Laura A Macedo; Laxmi Rao; Lily Tham; Linda Rodriguez; Lisa A White; Lisa Joniaux; Lucinda M Brickler; Lydia Tshulos; Marilyn Arbuthnott; Mark Scapp; Mayra Gonzalez; Michael Johnson; Myron L Kwast; Pamela S Powell; Pat Soriano; Patrick M Parkinson; Patrick Roche; Philip Aquilino; Ralph Santasiero; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; Stacy.L.Coleman@rich.frb.org; Stanley Poszywak; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Terry Muckleroy; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas J O'Keeffe; Tim.P.Clark@frb.gov; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Richard Kunen; Pat Soriano; John Harvey; Taitu Wondwosen; Paula Premo; Peter DeMontravel; Om Arya; Jane Wakefield; Jordan Pollinger DB September 15, 2008 Credit Risk Management Morning Update 09/15/2008 01:03 PM

**Restricted FR** Prepared by Moses Cheng and Tai Wondwosen Brief Update on Credit with CRM for DB:
(b)(4) & (b)(8)

************************************* Moses Cheng, CFA, FRM Federal Reserve Bank of New York 212-720-1433
BOG-- FOIA 10-251 --000664

212-250-6075

BOG-- FOIA 10-251 --000665

From: To: Subject: Date:

Patrick E McCabe Patrick Dwyer Money fund issues 09/15/2008 01:05 PM

Patrick:
(b) (4) Just got a note from , who's concerned about MMF exposure to (b) (4) , but for others. Have you heard any word about AIG and Lehman -- not for MMFs with NAV problems?

-Patrick

BOG-- FOIA 10-251 --000666

From: To: Cc: Subject: Date:

James Embersit Jon D Greenlee Adrienne Haden; Nina Nichols; Sabeth I Siddique Brainstorming meeting 09/15/2008 01:05 PM

Listened on the NY call, they seem to have a pretty comprehensive effort underway split into several streams including:
(b) (5)

That's all for now. Adrian, Nina, sabeth - feel free to correct me if I got anything wrong or missed something. Jim Embersit office - 202-452-5249 cell-202-528-7884 -Jim Embersit 202-452-5249 ------------------------BOG-- FOIA 10-251 --000667

Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000668

From: To:

Cc: Subject: Date:

Dianne Dobbeck Patricia Mosser; Hayley Boesky; Lance Auer; Christopher Calabia; Elise Liebers; Alexander J Psomas; Steven J Manzari; Jonathan Polk; Clinton Lively; Anthony Cirillo; Tobias Adrian; Gerard Dages; Richard Charlton; Richard Cahill; Steven Mirsky; Kyle Grieser; William Hallacy; Bard Stermasi; Paul Whynott; Catherine Voigts; Alejandro LaTorre; Beverly Hirtle; Til Schuermann; Judith J Gruttman; Wing.Oon@ny.frb.org; Kevin Clarke; Jennifer L. Hicks; Wilma Sabado; Jennifer Brett; Summer Cole; Jon D Greenlee; James Embersit; Sabeth I Siddique; Coryann Stefansson; Kevin Coffey Arthur Angulo; Sarah Dahlgren; Meg McConnell; Adam Ashcraft AIG & Identifying other firms under stress 09/15/2008 01:08 PM

As a follow-up to our discussion this morning, below is a quick outline for moving forward. For those of you that were not able to attend the meeting due to scheduling conflicts, we spoke about three efforts -- the most immediate of which relate to dimensioning risks posed by AIG. The other two streams are intended to (a) identify other non-bank intermediaries of potential concern, and (b) potential weaknesses at banks (with emphasis on regional and smaller foreigns). The points for each stream are identified below. Additionally, we'll look to have a preliminary view on all three workstreams toward the end of today with analysis to continue throughout the week.
(b) (5)

BOG-- FOIA 10-251 --000669

From: To: Subject: Date:

Jon D Greenlee William B English; William R Nelson; Michael S Gibson Fw: AIG gets New York's help in accessing $20 billion 09/15/2008 01:23 PM

In case you haven't seen this. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Diane Fraser/BOARD/FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 01:22 PM -----

To

09/15/2008 01:20 PM cc Subject

Jon D Greenlee/BOARD/FRS@BOARD, Adrienne Haden/BOARD/FRS@BOARD, James Embersit/BOARD/FRS@BOARD, Nina Nichols/BOARD/FRS, Sabeth I Siddique/BOARD/FRS@BOARD Diane.Fraser@frb.gov, Elise Liebers/NY/FRS@FRS AIG gets New York's help in accessing $20 billion

Business Insurance
AIG gets New York's help in accessing $20 billion

Sept. 15, 2008 NEW YORK (Reuters)—New York Gov. David Paterson said he and other state officials had reached an agreement with American International Group Inc that allows the insurer access to $20 billion of its own capital, staving off a liquidity crisis. Under the plan, AIG will be able to shift the funds from its insurance subsidiaries to the parent company. AIG had worked with New York officials through the weekend to shore up capital after rating agencies threatened downgrades. AIG's shares were down 55.6% at $5.39 after earlier touching $3.50. The company has posted $18 billion in cumulative losses over the past three quarters on guarantees it wrote on mortgage-linked securities. Gov. Paterson said he had worked with AIG in a bid to help save New York jobs, with the
BOG-- FOIA 10-251 --000670

insurer employing 6,000 in Manhattan and 8,600 statewide. He added that the plan was carefully crafted to pose no risk to New York taxpayers. New York Insurance Superintendent Eric Dinallo is appealing to the federal government on AIG's behalf to provide it additional access to capital, Gov. Paterson said. Copyright 2008 Reuters Limited. Click for restrictions.

BOG-- FOIA 10-251 --000671

From: To: Subject: Date: Attachments:

Danielle E Little Jeffrey Marquardt; RBOPS PAYMENT SYSTEM RISK; Jeff Stehm AIG FSB information 09/15/2008 01:32 PM AIG.xls AIG FSB 20080912.pdf

Good afternoon, Please find attached an Excel worksheet with attribute data of AIG's federal savings bank (AIG FSB) including cap class, asset, collateral, and overdrafting information.
(b) (4)

Also, please find attached an intraday balance report for AIG FSB. Please let me know if you have any questions or would like additional information. Thanks, Danielle

Danielle Little Federal Reserve Board 202.452.2605 danielle.e.little@frb.gov

BOG-- FOIA 10-251 --000672

(b) (4)

BOG-- FOIA 10-251 --000673

(b) (4)

BOG-- FOIA 10-251 --000674

From: To: Subject: Date:

(b) (4)
Patrick.M.Parkinson@frb.gov Well lets see what we have here 09/15/2008 01:37 PM

Market reacted better so far--but much of what we saw today was clients coming to us to deal with re-assignment of trades they had on with Lehman. Process is going forward---see below as I find this amazing--why does the FED need Morgan Stanley to assess options in the case of AIG--why not have US FED personnel work with Dinallo and co? What am I missing here? Why does Paulson have such a large role--what can I say I hope you get sleep as I hardly ever do these days--but I think the action taken personally was the right one.

(b) (4) 13:24 15Sep08 RTRS-MORGAN STANLEY <MS.N> HIRED BY FEDERAL RESERVE TO REVIEW OPTIONS REGARDING AIG <AIG.N> - SOURCE 13:25 15Sep08 RTRS-MORGAN STANLEY <MS.N> WILL REVIEW FED'S OPTIONS, WHAT SYSTEMIC RISK FROM AIG AIG.N> - SOURCE 13:26 15Sep08 RTRS-RPT-MORGAN STANLEY <MS.N> WILL REVIEW FED'S OPTIONS, WHAT SYSTEMIC RISK FROM AIG <AIG.N> - SOURCE
For Related News, Double Click on one of these codes: [E] [U] [C] [D] [M] [O] [T] [MTL] [GRO] [SOF] [OIL] [NAT] [US] [BSVC] [FINS] [INVS] [FIN] [FUND] [MRG] [BNK] [PVE] [REGS] [USC] [DBT] [MTG] [INSR] [MINS] [INS] [LEN] [RTRS] [MS.N] [AIG.N] For Relevant Price Information, Double Click on one of these codes: <MS.N> <AIG.N> Monday, 15 September 2008 13:24:13 RTRS [nWEN8079] {EN} ENDS

(b) (4)

BOG-- FOIA 10-251 --000675

From: To: Cc: Subject: Date:

John Harvey NY Bank Sup - LFI CPC Updates@FRS Christopher Hunter DB Clearing & Settlement update #3 - Final or today (9/15/08) 09/15/2008 01:45 PM

Please note the following update from Tom Devine, Director – Global Markets at 8:45 am.
(b)(4) & (b)(8)

Our next meeting with Mr. Devine will be tomorrow morning at 7am.

BOG-- FOIA 10-251 --000676

From: To: Subject: Date:

Gustavo A Suarez Patrick M Parkinson; JNellie Liang; Daniel M Covitz Fw: CP Market Update: 09/15/2008 01:51 PM

----- Forwarded by Gustavo A Suarez/BOARD/FRS on 09/15/2008 01:50 PM -----

(b) (4)
To 09/15/2008 01:45 PM cc Subject CP Market Update: <gustavo.a.suarez@frb.gov>, <william.dudley@ny.frb.org>, <william.dudley@ny.frb.org>, <Chris.Burke@ny.frb.org>

This was not a good day for CP. Liquidity was very poor. Think investor parking in Tbills and Treasuries, we only saw half the normal flows. Very tough gauging levels for issuer, traded between 1.5% an 8%. Bottom Line very very difficult market conditions today in CP and in Repo for RP outside Govt Collateral. Spent my morning fending off many many buyback bids wanted from investors on GECC CP and Aig CP.
(b) (4)

BOG-- FOIA 10-251 --000677

From: To: Cc: Subject: Date:

Coryann Stefansson BSR.LCBO.Management.Group@frb.gov BSR LIG; Betsy Cross Leh, aig etc 09/15/2008 02:16 PM

Please keep an eye out for Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # 202 294 9829

(b)(5)&(b)(8)

BOG-- FOIA 10-251 --000678

From: To: Cc: Subject: Date:

Coryann Stefansson Brian Peters; Betsy Cross; Kevin Bertsch Sarah Dahlgren Re: Fw: AIG & Identifying other firms under stress 09/15/2008 02:20 PM

I think the risk report can inform you regarding the exposures within the portfolio (b)(5)&(b)(8) and I know that we are doing liquidity monitoring across the board We will let you know if there is a problem Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # 202 294 9829 ▼ Brian Peters ----- Original Message ----From: Brian Peters Sent: 09/15/2008 01:40 PM EDT To: Coryann Stefansson; Betsy Cross; Kevin Bertsch Cc: Sarah Dahlgren Subject: Re: Fw: AIG & Identifying other firms under stress

Cory, Betsy, Kevin, please add Sarah and I to the email workstream summarizing the Regional work. Sarah and I need to be able to keep our principals informed of developments as well - we will work to avoid duplication too. thanks...bp
Duplicate

BOG-- FOIA 10-251 --000679

From: To: Subject: Date:

Adrienne Haden Diane Fraser; Barbara Cornyn Fw: Brainstorming meeting 09/15/2008 02:24 PM

FYI.

Adrienne Haden Assistant Director Banking Supervision and Regulation Board of Governors of the Federal Reserve System (202)452-2058 Office (202)528-7892 Mobile
----- Forwarded by Adrienne Haden/BOARD/FRS on 09/15/2008 02:23 PM ----James.Embersit@frb.gov To 09/15/2008 01:05 PM cc Jon.D.Greenlee@frb.gov "Adrienne Haden" <Adrienne.Haden@frb.gov>, "Nina Nichols" <Nina.Nichols@frb.gov>, Sabeth.I.Siddique@frb.gov Brainstorming meeting

Subject

Listened on the NY call, they seem to have a pretty comprehensive effort underway - split into several streams including:

Duplicate

BOG-- FOIA 10-251 --000680

From: To: Cc: Subject: Date:

Chris.Haley@bos.frb.org Coryann.Stefansson@frb.gov; BSR.LCBO.Management.Group@frb.gov BSR LIG; Betsy.Cross@frb.gov; Rhonda Kelley; Jim Nolan Re: Leh, aig etc 09/15/2008 02:40 PM

(b)(4) & (b)(8)

Chris -------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Coryann.Stefansson Sent: 09/15/2008 02:16 PM AST To: "BSR.LCBO.Management.Group@frb.gov" <BSR.LCBO.Management.Group@frb.gov> Cc: BSR.LIG@frbog.frb.gov; Betsy Cross Subject: Leh, aig etc

Duplicate

BOG-- FOIA 10-251 --000681

From: To: Cc: Subject: Date:

Diane.Fraser@frb.gov Maria.G.Perozek@frb.gov Diane.Fraser@frb.gov info on AIG & other info 09/15/2008 02:56 PM

By broad line of business, AIG’s revenues break down as follows: Property casualty operations: 42% Life insurance operations: 46% Financial products: 8% Asset management: 4% In general, state insurance statutes allow commercial insurance underwriters to pay out a maximum dividend amount of the greater of (1) the prior year-end net income, or (2) 10% of the surplus as regards policyholders, without the approval of the state’s insurance regulatory authority. State insurance regulatory authorities have the power to approve extraordinary dividends on a case-by-case basis. http://www.forbes.com/business/2008/09/15/insurance-aig-new-york-biz-wallcx_lm_0915aigupdate.html

BOG-- FOIA 10-251 --000682

From: To: Subject: Date:

BSR FBO, BD. OF GOV. OF FED. jill.k.cetina@frb.gov (BN) Morgan Stanley, Goldman Bonds Drop as Bank Default Risk Surges 09/15/2008 03:01 PM

+-----------------------------------------------------------------------------+ Morgan Stanley, Goldman Bonds Drop as Bank Default Risk Surges 2008-09-15 17:21:58.140 GMT

By Abigail Moses and Bryan Keogh Sept. 15 (Bloomberg) -- Morgan Stanley and Goldman Sachs Group Inc. led a record surge in the cost of default protection and a slump in bank bond prices after Lehman Brothers Holdings Inc. filed for bankruptcy. Credit-default swaps on Morgan Stanley soared to a record and the New York-based firm's senior notes fell the most since they were sold six month ago. Goldman's senior notes plummeted to a record low and the cost of protecting its bonds against default rose to an all-time high. Sellers were demanding upfront payments for protecting American International Group Inc. and Washington Mutual Inc. on rising concern that they would default. Investor speculation that Lehman's bankruptcy may trigger further takeovers or mergers roiled credit markets after the Treasury and the Federal Reserve declined to rescue Lehman, as they did in March with Bear Stearns Cos. Merrill Lynch & Co. agreed to be bought by Bank of America Corp. as the credit crisis threatened the global financial industry. Goldman and Morgan Stanley, the two remaining major Wall Street investment banks, ``made the same mistakes'' as Merrill and Lehman, and ``anybody in that business is at risk,'' said Gregory Habeeb, a portfolio manager at Calvert Asset Management Co. in Bethesda, Maryland. ``The dangers have intensified,'' said Habeeb, who manages $8.5 billion in fixed-income assets and doesn't own Lehman bonds. `` There was a lesson of Bear Stearns and apparently Lehman didn't learn it. The lesson at Bear Stearns and Lehman may have precipitated Merrill to do something.'' Upfront Payments Credit-default swaps on Morgan Stanley soared 189 basis points to 453 and its senior notes now yield more than a typical bond rated BB, or seven grades lower. Contracts on Goldman jumped 119 basis points to 318 basis points. Credit default swaps on Merrill, the world's biggest brokerage firm, dropped after it agreed to the Bank of America purchase. Increased credit-market turmoil is forcing 17 financial companies' credit-default swaps to trade upfront, meaning those seeking protection must make an initial payment as well as premiums, signaling rising default concern, according to CMA Datavision. Sellers demanded 47 percentage points upfront and 5 percentage points a year to protect the bonds of Washington Mutual from default on concern that the biggest U.S. savings and loan won't survive the credit crisis, according to CMA Datavision prices in New York. That compares with an upfront cost of 40 percentage points on Sept. 12 and means it would cost $5 million initially and $500,000 a year to protect $10 million in bonds for five years. AIG Bonds The upfront cost to protect AIG bonds from default soared 16.5 percentage points to 29 percentage points after earlier rising to 34 percentage points, CMA data show. The insurer's 5.85
BOG-- FOIA 10-251 --000683

percent notes due in 2018 fell 11.3 cents to 58.3 cents on the dollar to yield 14 percent, according to Trace, the Financial Industry Regulatory Authority's bond-pricing service. The U.S. government's decision not to bail out Lehman reduces the ``moral hazard'' introduced when Bear Stearns was rescued and the Bank of England nationalized mortgage lender Northern Rock Plc, according to Juan Esteban Valencia, a credit strategist at Societe Generale SA in London. ``The get-out-of-jail-free card turned out not to be worth what they thought,'' said Matt King, head of quantitative credit strategy at Citigroup Inc. in London. ``This makes it much, much harder for financial institutions to get the financing they need.'' Contracts on Wachovia Corp., the fourth-biggest U.S. bank, surged 129 basis points to 582 and JPMorgan Chase & Co. rose 42 to 185, CMA data show. Merrill dropped 139 basis points to 319 basis points. Bank of America increased 53 basis points to 212. Morgan Stanley Notes Morgan Stanley's 6.625 percent senior unsecured notes due in 2018 fell 9.3 cents to 82.9 cents on the dollar for a yield of 9.4 percent, according to Trace. Debt rated BB on average yields 9.1 percent, according to Merrill's U.S. High-Yield BB Rated index. Morgan Stanley's notes are rated A1 by Moody's Investors Service and A+ by Standard & Poor's. Goldman's 6.15 percent notes due in 2018 dropped 7.3 cents to 88.3 cents on the dollar to yield 7.9 percent, Trace data show. The New York-based securities firm's 6.35 percent bonds due in 2034 fell 10.6 cents to 71.7 cents on the dollar, for a yield of 9.3 percent. In Europe, HSBC Holdings Plc, Europe's biggest bank, and Barclays Plc led a jump in the cost of default protection, driving the benchmark Markit iTraxx Financial index of 25 banks and insurers a record 32 basis points higher to 127, according to JPMorgan. HSBC, Barclays The Markit CDX North America Investment Grade Index, linked to the bonds of 125 companies in the U.S. and Canada, rose 35.5 basis points to 186.5 as of 1:01 p.m., according to broker Phoenix Partners Group. Earlier they traded as high as 190 basis points. Credit-default swaps on London based HSBC soared 22 basis points to 93, the most ever, according to CMA Datavision prices in London. Barclays, the U.K.'s third-biggest bank, rose 34 to 166, Zurich-based UBS AG jumped 28 to 164 and Spain's Banco Santander surged 22 to 122. Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline signals the opposite. A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year. --With reporting by Caroline Salas and Shannon D. Harrington in New York. Editor: Michael Shanahan, John Pickering To contact the reporter on this story: Abigail Moses in London +44-2-7673-2118 or Amoses5@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at +44 207 673 2467 or gserkin@bloomberg.net.

BOG-- FOIA 10-251 --000684

From: To: Subject: Date: Attachments:

Jennifer Burns Coryann Stefansson Fw: Leh, aig etc 09/15/2008 03:14 PM Lehman20080909.xls Evergreen Statement on Lehman Exposure 9-15-2008.pdf Bill Dawson 9-15-2008 Lehman.doc

Jennifer Joseph Burns Banking Supervision and Regulation The Federal Reserve Bank of Richmond, Charlotte Branch Office 704· 358· 2550 · Cell 704· 287· 2813 jennifer.burns@rich.frb.org www.richmondfed.org

----- Forwarded by Jennifer Burns/RICH/FRS on 09/15/2008 03:13 PM ----Jeremy Carter/RICH/FRS

To cc

Jennifer Burns/RICH/FRS@FRS Lisa A White/RICH/FRS@FRS, Richard Westerkamp/RICH/FRS@FRS Re: Fw: Leh, aig etc

09/15/2008 02:51 PM

Subject

Jennifer,
Not Responsive

We are also working on AIG exposure and I have been notified that (b)(4) & (b)
(8)

Please let me know if you have further questions. Jeremy
Not Responsive

BOG-- FOIA 10-251 --000685

Jeremy J Carter Banking Supervision and Regulation/Large Complex Bank Organizations The Federal Reserve Bank of Richmond, Charlotte Branch Office 704· 358· 2584 · Cell 704· 281· 8224 jeremy.carter@rich.frb.org www.richmondfed.org

▼ Jennifer Burns/RICH/FRS
Jennifer Burns/RICH/FRS

To cc Subject

Richard Westerkamp/RICH/FRS@FRS, Jeremy Carter/RICH/FRS, Lisa A White/RICH/FRS@FRS Fw: Leh, aig etc

09/15/2008 02:28 PM

FYI - Rich you mentioned that this was on Wachovia's radar screen yesterday.
Jennifer Joseph Burns Banking Supervision and Regulation The Federal Reserve Bank of Richmond, Charlotte Branch Office 704· 358· 2550 · Cell 704· 287· 2813 jennifer.burns@rich.frb.org www.richmondfed.org

----- Forwarded by Jennifer Burns/RICH/FRS on 09/15/2008 02:24 PM ----Coryann.Stefansson@frb.gov To 09/15/2008 02:20 PM cc Subject "BSR.LCBO.Management.Group@frb.gov" <BSR.LCBO.Management.Group@frb.gov> BSR.LIG@frbog.frb.gov, "Betsy Cross" <Betsy.Cross@frb.gov> Leh, aig etc

Duplicate

BOG-- FOIA 10-251 --000686

BOG-- FOIA 10-251 --000687

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BOG-- FOIA 10-251 --000688

Not Responsive

BOG-- FOIA 10-251 --000689

Not Responsive

BOG-- FOIA 10-251 --000690

Not Responsive

BOG-- FOIA 10-251 --000691

Not Responsive

BOG-- FOIA 10-251 --000692

Not Responsive

BOG-- FOIA 10-251 --000693

Not Responsive

BOG-- FOIA 10-251 --000694

Not Responsive

BOG-- FOIA 10-251 --000695

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BOG-- FOIA 10-251 --000696

Not Responsive

BOG-- FOIA 10-251 --000697

Not Responsive

BOG-- FOIA 10-251 --000698

Not Responsive

BOG-- FOIA 10-251 --000699

Not Responsive

BOG-- FOIA 10-251 --000700

From: To: Subject: Date: Importance:

Scott Alvarez William R Nelson AIG memo 09/15/2008 03:20 PM High

Bill, I'd also send it to the Vice Chair. Scott

BOG-- FOIA 10-251 --000701

From: To: Subject: Date: Attachments:

William R Nelson Brian F Madigan aig memo 09/15/2008 03:22 PM AIG memo v4.doc

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542

BOG-- FOIA 10-251 --000702

(b) (5)

BOG-- FOIA 10-251 --000703

(b) (5)

BOG-- FOIA 10-251 --000704

(b) (5)

BOG-- FOIA 10-251 --000705

(b) (5)

BOG-- FOIA 10-251 --000706

(b) (5)

BOG-- FOIA 10-251 --000707

DRAFT

-6Restricted Controlled (FR)

BOG-- FOIA 10-251 --000708

DRAFT

-7(b) (5)

BOG-- FOIA 10-251 --000709

DRAFT

-8(b) (5)

BOG-- FOIA 10-251 --000710

DRAFT

-9Restricted Controlled (FR)
(b) (5)

BOG-- FOIA 10-251 --000711

DRAFT

- 10 Restricted Controlled (FR)
(b) (5)

BOG-- FOIA 10-251 --000712

DRAFT

- 11 Restricted Controlled (FR)
(b) (5)

BOG-- FOIA 10-251 --000713

DRAFT

- 12 Restricted Controlled (FR)
(b) (5)

BOG-- FOIA 10-251 --000714

DRAFT

- 13 Restricted Controlled (FR)
(b) (5)

BOG-- FOIA 10-251 --000715

From: To: Subject: Date:

William R Nelson Brian F Madigan Fw: AIG memo 09/15/2008 03:23 PM

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
Scott Alvarez/BOARD/FRS

----- Forwarded by William R Nelson/BOARD/FRS on 09/15/2008 03:22 PM -----

To cc Subject

William R Nelson/BOARD/FRS@BOARD AIG memo

09/15/2008 03:20 PM

Bill, I'd also send it to the Vice Chair. Scott

BOG-- FOIA 10-251 --000716

From: To: Subject: Date:

David W Skidmore Michelle A Smith; Calvin Mitchell; Andrew Williams from wsj.com re AIG 09/15/2008 03:46 PM

What do we know about this? What are we saying? "Federal government asks Goldman, J.P. Morgan Chase to lead $70 billion-$75 billion lending facility for AIG. Full update to follow. "

BOG-- FOIA 10-251 --000717

From: To: Cc: Subject: Date:

Michelle A Smith David W Skidmore Andrew Williams; Calvin Mitchell Re: from wsj.com re AIG 09/15/2008 03:48 PM

I just talked with calvin about it. he will call us back. ▼ David W Skidmore/BOARD/FRS Duplicate

BOG-- FOIA 10-251 --000718

From: To:

Cc:

Subject: Date: Importance:

Thomas J O'Keeffe Alejandro LaTorre; Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Gorzkowski; Barbara Yelcich; Bard Stermasi; Brandon Hall; Brian Peters; Caren Cox; Caroline Frawley; Caroline Nuffort; Catherine A Tilford; Catherine Voigts; Chris Haley; Chris McCurdy; Christina Zausner; Christopher Calabia; Christopher Powell; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Daniel Sullivan; Deborah Lohnau; Deborah P Bailey; Denise Goodstein; Dennis Herbst; Dennis Ryan; Dianne Dobbeck; Dmitry J Gershik; Elizabeth Gress; Elizabeth Tafone; Gail Santora; Genevievette.E.Walker@frb.gov; Gerard Dages; Glen Reppy; Gretchen Cappiello; Gretchen Walker; H Clay Saylor; Hasan Latif; Hayley Boesky; Homer Hill; Isabella Lo Piccolo; Jack Jennings; James Embersit; James Hodgetts; James Wall; Jan Voigts; Jane Green; Jane Majeski; Jane Wakefield; Jeanmarie Davis; Jeffrey Kowalak; Jeffrey Levine; Jeffrey Plaskett; Jim Mahoney; Joanna Wisniecka; John Beebe; John Heinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kerry STREETS; Kevin Clarke; Kevin Coffey; Kevin Lee; Kevin Littler; Kirsten Harlow; Kyle Grieser; Lance Auer; Larry Bonnemere; Laura A Macedo; Lawrence ROSTOKER; Laxmi Rao; Lily Tham; Linda Rodriguez; Lisa A White; Lisa Joniaux; Lucinda M Brickler; Lydia Tshulos; Mark Scapp; Meg McConnell; Meinrad Danzer; Michael Johnson; Myron L Kwast; Bin Lang; Brian Hefferle; Caroline Nuffort; Isabella Lo Piccolo; Joanna Wisniecka; Joshua Sherwin; Kathryn Chen; Kenton Beerman; Mayra Gonzalez; Randolph Brown; Susan G Ballinger; Susan Goldberg; Thomas J O'Keeffe; Pamela S Powell; Pat Soriano; Patrick M Parkinson; Patrick Roche; Philip Aquilino; Ralph Santasiero; Randolph Brown; Renuka Vijayanathan; Richard Heeseler; Richard Kunen; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; Robert D Patalano; Robert Gutierrez; Roberto Perli; Roger Graham; Rohit Bansal; Ron Fox; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; Stacy.L.Coleman@rich.frb.org; Stanley Poszywak; Stephanie Chaly; Steven Friedman; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Terrence Checki; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas Dolan; Thomas J O'Keeffe; Tim.P.Clark@frb.gov; Todd Waszkelewicz; Wendy Ng; William B English; William BRODOWS; William Rutledge; Wing Oon; Alexa Philo; Ann Miner; Barbara Yelcich; Betsy Gordon; Caroline Frawley; Catherine Voigts; Che Sidanius; Christopher Hunter; Claudia Franco; Clinton Lively; Deborah Lohnau; Denise Goodstein; Dennis Ryan; Dianne Dobbeck; Glen Reppy; Gregory Gaare; Jacqueline Lovisa; James DeFalco; James Wall; Jane Wakefield; Jeanmarie Davis; Jim Mahoney; John Harvey; John Reynolds; John Ricketti; John Ruocco; Karen Kahrs; Lisa Joniaux; Lydia Tshulos; Mark Scapp; Patrick Roche; Peter Drake; Ralph Santasiero; Randolph Brown; Richard Cahill; Sara Mahmoud; Sarah Dahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan Goldberg; Timothy Carlin; Todd Waszkelewicz; Yogesh Shah Bin Lang; Brian Hefferle; Caroline Nuffort; Isabella Lo Piccolo; Joanna Wisniecka; Joshua Sherwin; Kathryn Chen; Kenton Beerman; Mayra Gonzalez; Randolph Brown; Susan G Ballinger; Susan Goldberg; Thomas J O'Keeffe Afternoon Liquidity Team Update 09/15/2008 03:53 PM High

Restricted F.R. Not Responsive

BOG-- FOIA 10-251 --000719

Not Responsive

6. Money Funds – Not Responsive noted Reserve Funds had a large amount of Lehman and AIG exposure and will probably ‘break the buck’ and need to be acquired by an outside party. Not Responsive
(b) (4)

************************************************ Thomas J. O'Keeffe, CFA Bank Supervision Federal Reserve Bank of New York (212)720-5568 ***********************************************

BOG-- FOIA 10-251 --000720

From: To: Subject: Date: Attachments:

Susan V Foley Jeffrey Marquardt; Jeff Stehm; RBOPS PAYMENT SYSTEM RISK Fw: AIG FSB information--Update 09/15/2008 04:07 PM AIG.xls AIG FSB 20080912.pdf

Spoke to Philly. AIG FSB is at a zero cap (no collateral) on the real time monitor. The FSB was notified and was fine with the zero cap--they have very low levels of DLOD (average about $5,000). The FSB does have OC 10 documents on file. It appears that the FSB is fairly insulated from the affiliates/parent; had been more interactions in the past but less so today. Not Responsive

In both cases, Philly indicated to the FSBs that the 23A exemption just announced would not apply to them. (thoughts?) Philly will be circulating a memo shortly with this and other information. I will forward when I receive.

Susan Foley Assistant Director Payment System Risk Federal Reserve Board (202) 452-3596

----- Forwarded by Susan V Foley/BOARD/FRS on 09/15/2008 03:54 PM ----Danielle E Little/BOARD/FRS

To

09/15/2008 01:32 PM

Jeffrey Marquardt/BOARD/FRS@BOARD, RBOPS PAYMENT SYSTEM RISK, Jeff Stehm/BOARD/FRS@BOARD AIG FSB information

cc Subject

Duplicate

BOG-- FOIA 10-251 --000721

From: To: Cc: Subject: Date:

Cynthia L Martin Elise Liebers; Diane Fraser Kimberly A DeTrask; Patrick deFontnouvelle; Cynthia L Bordelon; Bart Simon Lending facility for AIG proposed today 09/15/2008 04:10 PM

Bank, Broker/Dealer & Insurance Underwriter - Operations and Strategy Report: Feds asking i-bank support for potential AIG options September 15, 2008 3:57 PM ET By Thomas Mason

The U.S. government has requested JPMorgan Chase & Co. and Goldman Sachs Group Inc. lead a lending facility for American International Group Inc. to the tune of $70 billion to $75 billion, The Wall Street Journal reported in a posting to its Web site on Sept. 15. Meanwhile, the New York Times' DealBook blog reported in a posting at 1:56 p.m. Eastern time that the Federal Reserve has hired Morgan Stanley for advice on potential options to support the insurance behemoth. The Times said aid could include a $20 billion bridge loan. Earlier, Treasury Secretary Henry Paulson denied that the federal government would provide a bridge loan. "What's going on in New York has got nothing to do with any bridge loan from the government," Paulson said at a Sept. 15 press conference. "What's going on in New York is a private-sector effort."

Site content and design Copyright © 2008, SNL Financial LC Usage of this product is governed by the Master Subscription Agreement Cynthia Martin Federal Reserve Bank of Boston 600 Atlantic Avenue Boston, MA 02210 617 973-3178 (office) 617 619-8478 (fax)

BOG-- FOIA 10-251 --000722

From: To: Cc: Subject: Date:

Jeffrey Levine NY Bank Sup - LFI CPC Updates Theonilla Lee-Chan; Barbara Yelcich; Gregory Gaare; Laura Braverman; Jennifer Tranter; Erin Upton; Edgar Moreano; Christopher Hunter; Antonino Piscitello; James DeFalco; Liska Holness; Benjamin Eddy JPMC: Liquidity Update from afternoon meeting with Treasury 09/15/2008 04:11 PM

**Strictly Confidential - F.R. Material** All, Below are some highlights from this afternoon's call with JPMC's Treasury. Jeff
(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000723

(b) (4) and (b) (8)

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000724

From: To: Cc: Subject: Date:

Calvin Mitchell Michelle A Smith; David W Skidmore Andrew Williams Re: from wsj.com re AIG 09/15/2008 04:11 PM

This is not true. JPMC and GS are working on behalf of AIG to come up with significant funding. (JPMC has been hired by AIG to help it explore possibilities. And Goldman represents potential principal investors.) We are convening the parties to assist their discussions. Duplicate

BOG-- FOIA 10-251 --000725

From: To: Cc: Subject: Date:

Alejandro.LaTorre@ny.frb.org Christopher.Calabia@ny.frb.org; Patricia.Mosser@ny.frb.org; Michael Gibson; Jon Greenlee; Richard Charlton; Jonathan Polk; Azish Filabi NY Banksup AIG Monitoring and Analysis@glc.frb.org Re: please get a new dial in for the call with the insurance department... 09/15/2008 04:13 PM

I will send out a new line and send to hampton. Sent from my BlackBerry Handheld

----- Original Message ----From: Christopher Calabia Sent: 09/15/2008 04:13 PM EDT To: Patricia Mosser; Alejandro LaTorre Cc: NY Banksup AIG Monitoring and Analysis Subject: please get a new dial in for the call with the insurance

(b) (5)
...and if you get the package they were discussing, could you pass it along?

BOG-- FOIA 10-251 --000726

From: To: Subject: Date:

Michelle A Smith Calvin Mitchell Re: from wsj.com re AIG 09/15/2008 04:13 PM

You telling people that? ▼ Calvin Mitchell Duplicate

BOG-- FOIA 10-251 --000727

From: To: Subject: Date:

Calvin Mitchell Michelle A Smith Re: from wsj.com re AIG 09/15/2008 04:15 PM

Yup ▼ Michelle A Smith Duplicate

BOG-- FOIA 10-251 --000728

From: To:

Subject: Date: Attachments:

Patricia Mosser Adam Ashcraft; Alejandro LaTorre; Alexa Philo; Alexander J Psomas; Azish Filabi; Bard Stermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; Danielle Vicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried; Gerard Dages; Jim Mahoney; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Min Kim; Niall E Coffey; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar; Michael S Gibson; Jon D Greenlee AIG info 09/15/2008 04:15 PM Scan001.pdf

----- Forwarded by Patricia Mosser/NY/FRS on 09/15/2008 04:14 PM ----"Swift, Christopher" <Christopher.Swift@aig.com> Sent by: "Turco, Antonia" <Antonia.Turco@aig.com>

To

"'HFiner@ins.state.ny.us'" <HFiner@ins.state.ny.us>, Patricia Mosser <Patricia.Mosser@ny.frb.org>, EDinallo@ins.state.ny.us JKenny@ins.state.ny.us, KBrooks@ins.state.ny.us, Joseph Fritsch <JFritsch@ins.state.ny.us>, MMoriart@ins.state.ny.us, Robert Easton <REaston@ins.state.ny.us>, Dennis Fernez <DFernez@ins.state.ny.us>, "Swift, Christopher" <Christopher.Swift@aig.com> RE: contacts

cc 09/15/2008 03:11 PM

Subject

Please see attached materials for this call. CS

Best Regards, Toni Turco on behalf of Chris Swift Executive Assistant to Christopher Swift Vice President and Chief Financial Officer AIG Life and Retirement Services 70 Pine Street - 17th Floor Tel: 212-770-5286 / Fax: 212-770-7620
From: HFiner@ins.state.ny.us [mailto:HFiner@ins.state.ny.us] Sent: Monday, September 15, 2008 3:05 PM To: Patricia Mosser; EDinallo@ins.state.ny.us Cc: JKenny@ins.state.ny.us; KBrooks@ins.state.ny.us; Joseph Fritsch; MMoriart@ins.state.ny.us; Robert Easton; Dennis Fernez; Swift, Christopher Subject: Re: contacts

BOG-- FOIA 10-251 --000729

We'll be on momentarily.

From: Patricia.Mosser Sent: 09/15/2008 03:05 PM AST To: Hampton Finer; Eric Dinallo Cc: John Kenny; Kermitt Brooks Subject: Re: contacts

Yes thanks. ----------------------------Patricia C. Mosser, FRB-NY Sent from my BlackBerry Handheld.

From: HFiner Sent: 09/15/2008 02:12 PM AST To: Patricia Mosser; EDinallo@ins.state.ny.us Cc: JKenny@ins.state.ny.us; KBrooks@ins.state.ny.us Subject: Re: contacts

I'm trying to line up the ceo of the agc life holding company and the p&c leadership to answer our questions. We can talk internally afterwards Does this work for you trish?

From: Patricia.Mosser Sent: 09/15/2008 01:42 PM AST To: Eric Dinallo Cc: Hampton Finer; John Kenny; Kermitt Brooks Subject: Re: contacts If 3 pm still works for all of you, here is a dial in number to use.
BOG-- FOIA 10-251 --000730

USA Toll-Free: (877)322-9654 * USA Caller Paid/International Toll: (954)797-1657 * HOST CODE: 992750 * PARTICIPANT CODE: 757558

Thanks Trish

EDinallo@ins.state.ny.us To "Patricia Mosser" <Patricia.Mosser@ny.frb.org> cc "Kermitt Brooks" <KBrooks@ins.state.ny.us>, "Hampton Finer" <hfiner@ins.state.ny.us>, "John Kenny" <jkenny@ins.state.ny.us> Subject Re: contacts

09/15/2008 12:53 PM

Sure. Kermit will call. I'm on with RAs now.

From: Patricia.Mosser Sent: 09/15/2008 12:51 PM AST To: Eric Dinallo Subject: Re: contacts

Eric, Since you have been over here visiting Tim, perhaps we could try for a call a bit later today -- Would 3 pm work? Trish

BOG-- FOIA 10-251 --000731

EDinallo@ins.state.ny.us

09/15/2008 11:30 AM

To "Patricia Mosser" <Patricia.Mosser@ny.frb.org> cc Subject Re: contacts

Sure. I'm on the way now.

From: Patricia.Mosser Sent: 09/15/2008 11:27 AM AST To: Eric Dinallo Cc: Hampton Finer; John Kenny Subject: Re: contacts

Eric, Would you and your team have time for a followup call with us today? We'd like to get a sense of where you think things stand, and if possible some sense of contingency plans for the regulated parts of the firm. Thanks Trish

BOG-- FOIA 10-251 --000732

EDinallo@ins.state.ny.us

09/14/2008 09:40 AM

To "Patricia Mosser" <Patricia.Mosser@ny.frb.org> cc "John Kenny" <jkenny@ins.state.ny.us>, "Hampton Finer" <hfiner@ins.state.ny.us> Subject Re: contacts

Ok. I'm having a team call at 10 am and then we could flip to all of you at 10:30. Do you want to create a dial-in that we would join or you join ours? I'm cc-ing some of my group who may have ideas.

From: Patricia.Mosser Sent: 09/14/2008 09:12 AM AST To: Eric Dinallo Subject: Re: contacts Thanks. We have a few folks from the Board of Govs in DC who would also like to call in if possible. ----------------------------Patricia C. Mosser, FRB-NY Sent from my BlackBerry Handheld.

From: EDinallo Sent: 09/14/2008 08:59 AM AST To: Patricia Mosser
BOG-- FOIA 10-251 --000733

Subject: Re: contacts Yes. I will set up.

From: Patricia.Mosser Sent: 09/14/2008 08:58 AM AST To: Eric Dinallo Subject: Re: contacts Would some of your experts be available for a conference call at 10:30 this morning? Trish ----------------------------Patricia C. Mosser, FRB-NY Sent from my BlackBerry Handheld.

From: EDinallo Sent: 09/13/2008 06:17 PM AST To: Patricia Mosser Subject: Re: contacts Just tried yiur cell.

From: Patricia.Mosser Sent: 09/13/2008 03:35 PM AST To: Eric Dinallo Subject: Re: contacts

Eric, What time would be convenient for a call? I can also be reached at my cell (b) (6) If I should contact you at your office, please let me know the number. Thanks Trish Patricia C. Mosser Senior Vice President, Markets Group
BOG-- FOIA 10-251 --000734

(b) (6)

Capital Markets Analysis and Trading Federal Reserve Bank of New York (212) 720-6416 Trading desk: (212)720-6860/6880 All numbers may be also dialed with 646 area code.

William Rutledge/NY/FRS

09/13/2008 01:14 PM

To edinallo@ins.state.ny.us cc Patricia Mosser/NY/FRS@FRS Subject contacts

Eric: Contact numbers: Trish 720-6416; mine 720-5268

Bill

BOG-- FOIA 10-251 --000735

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000736

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000737

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000738

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000739

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000740

From: To: Subject: Date:

Cynthia L Martin Elise Liebers; Diane Fraser Fw: FRB has hired Morgan Stanley for advice on AIG? 09/15/2008 04:16 PM

oops, didn't read this through before sending ! - second paragraph below

Cynthia Martin Federal Reserve Bank of Boston 600 Atlantic Avenue Boston, MA 02210 617 973-3178 (office) 617 619-8478 (fax)

----- Forwarded by Cynthia L Martin/BOS/FRS on 09/15/2008 04:15 PM ----Cynthia L Martin/BOS/FRS

To cc

Elise Liebers/NY/FRS, Diane Fraser/BOARD/FRS Kimberly A DeTrask/BOS/FRS@FRS, Patrick deFontnouvelle/BOS/FRS@FRS, Cynthia L Bordelon/BSR/CHI/FRS@FRS, Bart Simon/BOS/FRS@FRS Lending facility for AIG proposed today

09/15/2008 04:13 PM Subject

Bank, Broker/Dealer & Insurance Underwriter - Operations and Strategy Report: Feds asking i-bank support for potential AIG options September 15, 2008 3:57 PM ET By Thomas Mason

The U.S. government has requested JPMorgan Chase & Co. and Goldman Sachs Group Inc. lead a lending facility for American International Group Inc. to the tune of $70 billion to $75 billion, The Wall Street Journal reported in a posting to its Web site on Sept. 15. Meanwhile, the New York Times' DealBook blog reported in a posting at 1:56 p.m. Eastern time that the Federal Reserve has hired Morgan Stanley for advice on potential options to support the insurance behemoth. The Times said aid could include a $20 billion bridge loan. Earlier, Treasury Secretary Henry Paulson denied that the federal government would provide a bridge loan. "What's going on in New York has got nothing to do with any bridge loan from the government," Paulson said at a Sept. 15 press conference. "What's going on in New York is
BOG-- FOIA 10-251 --000741

a private-sector effort."

Site content and design Copyright © 2008, SNL Financial LC Usage of this product is governed by the Master Subscription Agreement Cynthia Martin Federal Reserve Bank of Boston 600 Atlantic Avenue Boston, MA 02210 617 973-3178 (office) 617 619-8478 (fax)

BOG-- FOIA 10-251 --000742

From: To: Subject: Date:

Michael S Gibson Brian F Madigan; William R Nelson; Jon D Greenlee; William B English Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:20 PM

The call focused on the securities lending program and on the overall plan for AIG. 1. Securities lending
(b) (8)

2. The overall plan
(b) (8)

The investment bankers will brief Tim Geithner at 6pm. Mike G.

BOG-- FOIA 10-251 --000743

From: To: Subject: Date:

Jon D Greenlee Roger Cole; Deborah P Bailey Fw: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:21 PM

I was on the call. Mike's summary below is accurate. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 Duplicate

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 04:21 PM -----

BOG-- FOIA 10-251 --000744

From: To: Subject: Date:

Deborah P Bailey Rita C Proctor; Donald L Kohn; Elizabeth A Duke; Randall S Kroszner; Kevin Warsh Fw: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:26 PM

FYI. You may have gotten this from other channels.
Jon D Greenlee/BOARD/FRS

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/15/2008 04:23 PM -----

To cc Subject

Roger Cole/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD Fw: Notes from 3pm call with AIG, NYSID, FRBNY

09/15/2008 04:21 PM

Duplicate

BOG-- FOIA 10-251 --000745

From: To: Subject: Date:

Rita C Proctor

(b) (6)
Fw: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:28 PM

Deborah P Bailey/BOARD/FRS

To

09/15/2008 04:26 PM cc Subject

Rita C Proctor/BOARD/FRS@BOARD, Donald L Kohn/BOARD/FRS@BOARD, Elizabeth A Duke/BOARD/FRS@BOARD, Randall S Kroszner/BOARD/FRS@BOARD, Kevin Warsh/BOARD/FRS@BOARD Fw: Notes from 3pm call with AIG, NYSID, FRBNY

FYI. You may have gotten this from other channels.
Jon D Greenlee/BOARD/FRS

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/15/2008 04:23 PM -----

To cc Subject

Roger Cole/BOARD/FRS@BOARD, Deborah P Bailey/BOARD/FRS@BOARD Fw: Notes from 3pm call with AIG, NYSID, FRBNY

09/15/2008 04:21 PM

Duplicate

BOG-- FOIA 10-251 --000746

From: To: Cc: Subject: Date:

Jon D Greenlee Michael S Gibson Brian F Madigan; Michael S Gibson; William B English; William R Nelson Re: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:31 PM

(b) (8)

Mike - thanks for doing this. Jon Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962 ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To

Brian F Madigan/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Notes from 3pm call with AIG, NYSID, FRBNY

cc 09/15/2008 04:20 PM Subject

(b) (8)

BOG-- FOIA 10-251 --000747

From: To: Subject: Date:

William R Nelson Michael S Gibson Re: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:32 PM

thanks Mike. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 (b) (6) Mobile: ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

(b) (5)

To

Brian F Madigan/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Notes from 3pm call with AIG, NYSID, FRBNY

cc 09/15/2008 04:20 PM Subject

(b) (8)

BOG-- FOIA 10-251 --000748

From: To: Subject: Date:

Michael S Gibson William R Nelson Re: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:33 PM

(b) (5) ▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD

09/15/2008 04:32 PM

Re: Notes from 3pm call with AIG, NYSID, FRBNY

thanks Mike. Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542 ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

(b) (5)

To

Brian F Madigan/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Notes from 3pm call with AIG, NYSID, FRBNY

cc 09/15/2008 04:20 PM Subject

Duplicate

BOG-- FOIA 10-251 --000749

From: To: Subject: Date:

William R Nelson Brian F Madigan Fw: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:33 PM

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 Mobile: 703-340-4542
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

----- Forwarded by William R Nelson/BOARD/FRS on 09/15/2008 04:33 PM -----

To cc Subject

William R Nelson/BOARD/FRS@BOARD

Re: Notes from 3pm call with AIG, NYSID, FRBNY

09/15/2008 04:33 PM

(b) (5)

▼ William R Nelson/BOARD/FRS
William R Nelson/BOARD/FRS

To cc Subject

Michael S Gibson/BOARD/FRS@BOARD

09/15/2008 04:32 PM

Re: Notes from 3pm call with AIG, NYSID, FRBNY

Duplicate

BOG-- FOIA 10-251 --000750

From: To: Subject: Date:

Michael S Gibson Patrick M Parkinson Fw: Notes from 3pm call with AIG, NYSID, FRBNY 09/15/2008 04:36 PM

Pat, I forgot to include you on this. Mike
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

----- Forwarded by Michael S Gibson/BOARD/FRS on 09/15/2008 04:36 PM -----

To

Brian F Madigan/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Notes from 3pm call with AIG, NYSID, FRBNY

cc 09/15/2008 04:20 PM Subject

Duplicate

BOG-- FOIA 10-251 --000751

From: To: Cc: Subject: Date: Attachments:

(b) (6)
Brian F Madigan Donald L Kohn; Scott Alvarez Re: Draft memo on AIG 09/15/2008 04:53 PM AIG memo v4.doc

------Brian, here is the email on AIG that I composed before our conversation----------Brian:
(b) (5) (b) (5)

(b) (5)

Ben ▼ Brian F Madigan/BOARD/FRS
Brian F Madigan/BOARD/FRS

To cc Subject

(b) (6)

Kohn/BOARD/FRS@BOARD Scott Alvarez/BOARD/FRS@BOARD Draft memo on AIG

Donald L

09/15/2008 03:30 PM

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(b) (5)

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From: To: Subject: Date:

Adrienne Haden BSR Operational & IT Risk; Chris Chukwu Fw: Afternoon Liquidity Team Update 09/15/2008 04:55 PM

Adrienne Haden Assistant Director Banking Supervision and Regulation Board of Governors of the Federal Reserve System (202)452-2058 Office (202)528-7892 Mobile
----- Forwarded by Adrienne Haden/BOARD/FRS on 09/15/2008 04:55 PM ----Jon D Greenlee/BOARD/FRS

To

09/15/2008 03:56 PM cc Subject

Sabeth I Siddique/BOARD/FRS@BOARD, James Embersit/BOARD/FRS@BOARD, Nina Nichols/BOARD/FRS@BOARD, Adrienne Haden/BOARD/FRS@BOARD Fw: Afternoon Liquidity Team Update

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Thomas J O'Keeffe/NY/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 03:54 PM -----

To

09/15/2008 03:53 PM

Alejandro LaTorre/NY/FRS@FRS, Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS, Andrew Small/NY/FRS@FRS, Anthony Cirillo/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, Barbara Gorzkowski/NY/FRS@FRS, Barbara Yelcich/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS, Brandon Hall/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Caren Cox/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS, Caroline Nuffort/NY/FRS@FRS, Catherine A Tilford/BOARD/FRS@BOARD, Catherine Voigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, Chris McCurdy/NY/FRS@FRS, Christina Zausner/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Christopher Powell/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS, Clinton Lively/NY/FRS@FRS, Corbin Long/NY/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Craig F Marchbanks/BOARD/FRS@BOARD, Craig Leiby/NY/FRS@FRS, Cynthia Graves/NY/FRS@FRS, Daniel Muccia/NY/FRS@FRS, Daniel Sullivan/NY/FRS@FRS, Deborah Lohnau/NY/FRS@FRS,

BOG-- FOIA 10-251 --000765

Deborah P Bailey/BOARD/FRS@BOARD, Denise Goodstein/NY/FRS@FRS, Dennis Herbst/NY/FRS@FRS, Dennis Ryan/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Dmitry J Gershik/NY/FRS@FRS, Elizabeth Gress/RICH/FRS@FRS, Elizabeth Tafone/NY/FRS@FRS, Gail Santora/NY/FRS@FRS, Genevievette.E.Walker@frb.gov, Gerard Dages/NY/FRS@FRS, Glen Reppy/NY/FRS@FRS, Gretchen Cappiello/NY/FRS@FRS, Gretchen Walker/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS, Hasan Latif/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Homer Hill/NY/FRS@FRS, Isabella Lo Piccolo/NY/FRS@FRS, Jack Jennings/BOARD/FRS@BOARD, James Embersit/BOARD/FRS@BOARD, James Hodgetts/NY/FRS@FRS, James Wall/NY/FRS@FRS, Jan Voigts/NY/FRS@FRS, Jane Green/NY/FRS@FRS, Jane Majeski/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS, Jeanmarie Davis/NY/FRS@FRS, Jeffrey Kowalak/NY/FRS@FRS, Jeffrey Levine/NY/FRS@FRS, Jeffrey Plaskett/SF/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Joanna Wisniecka/NY/FRS@FRS, John Beebe/RICH/FRS@FRS, John Heinze/NY/FRS@FRS, John Reynolds/NY/FRS@FRS, John Ricketti/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Jonathan Polk/NY/FRS@FRS, Joseph Galati/NY/FRS@FRS, Judith J Gruttman/NY/FRS@FRS, Kara Sulmasy/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS, Katheryn Van der Celen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS, Kerry STREETS/NY/FRS@FRS, Kevin Clarke/NY/FRS@FRS, Kevin Coffey/NY/FRS@FRS, Kevin Lee/NY/FRS@FRS, Kevin Littler/RICH/FRS@FRS, Kirsten Harlow/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS, Lance Auer/NY/FRS@FRS, Larry Bonnemere/NY/FRS@FRS, Laura A Macedo/BOARD/FRS@BOARD, Lawrence ROSTOKER/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS, Lily Tham/NY/FRS@FRS, Linda Rodriguez/NY/FRS@FRS, Lisa A White/RICH/FRS@FRS, Lisa Joniaux/NY/FRS@FRS, Lucinda M Brickler/NY/FRS@FRS, Lydia Tshulos/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Meg McConnell/NY/FRS@FRS, Meinrad Danzer/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS, Myron L Kwast/BOARD/FRS@BOARD, Bin Lang/NY/FRS@FRS, Brian Hefferle/NY/FRS@FRS, Caroline Nuffort/NY/FRS@FRS, Isabella Lo Piccolo/NY/FRS@FRS, Joanna Wisniecka/NY/FRS@FRS, Joshua Sherwin/NY/FRS@FRS, Kathryn Chen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS, Mayra Gonzalez/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS, Thomas J O'Keeffe/NY/FRS@FRS, Pamela S Powell/BOARD/FRS@BOARD, Pat Soriano/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD, Patrick Roche/NY/FRS@FRS, Philip Aquilino/SF/FRS@FRS, Ralph Santasiero/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS, Renuka Vijayanathan/NY/FRS@FRS, Richard Heeseler/NY/FRS@FRS, Richard Kunen/NY/FRS@FRS, Richard Naylor/BOARD/FRS@BOARD, Richard Roberts/NY/FRS@FRS, Richard Westerkamp/RICH/FRS@FRS, Rick Weaver/NY/FRS@FRS, Robert D Patalano/NY/FRS@FRS, Robert
BOG-- FOIA 10-251 --000766

Gutierrez/NY/FRS@FRS, Roberto Perli/BOARD/FRS@BOARD, Roger Graham/NY/FRS@FRS, Rohit Bansal/NY/FRS@FRS, Ron Fox/RICH/FRS@FRS, Ronald Stroz/NY/FRS@FRS, Sandy Krieger/NY/FRS@FRS, Sara Mahmoud/NY/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stacy.L.Coleman@rich.frb.org, Stanley Poszywak/RICH/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven Friedman/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS, Terrence Checki/NY/FRS@FRS, Theodore Lubke/NY/FRS@FRS, Theonilla Lee-Chan/NY/FRS@FRS, Theresa Barry/BOS/FRS@FRS, Thomas Dolan/NY/FRS@FRS, Thomas J O'Keeffe/NY/FRS@FRS, Tim.P.Clark@frb.gov, Todd Waszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS, William B English/BOARD/FRS@BOARD, William BRODOWS/NY/FRS@FRS, William Rutledge/NY/FRS@FRS, Wing Oon/NY/FRS@FRS, Alexa Philo/NY/FRS@FRS, Ann Miner/NY/FRS@FRS, Barbara Yelcich/NY/FRS@FRS, Betsy Gordon/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Che Sidanius/NY/FRS@FRS, Christopher Hunter/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS, Clinton Lively/NY/FRS@FRS, Deborah Lohnau/NY/FRS@FRS, Denise Goodstein/NY/FRS@FRS, Dennis Ryan/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Glen Reppy/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS, Jacqueline Lovisa/NY/FRS@FRS, James DeFalco/NY/FRS@FRS, James Wall/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS, Jeanmarie Davis/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, John Harvey/NY/FRS@FRS, John Reynolds/NY/FRS@FRS, John Ricketti/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS, Lisa Joniaux/NY/FRS@FRS, Lydia Tshulos/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Patrick Roche/NY/FRS@FRS, Peter Drake/NY/FRS@FRS, Ralph Santasiero/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS, Richard Cahill/NY/FRS@FRS, Sara Mahmoud/NY/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS, Timothy Carlin/NY/FRS@FRS, Todd Waszkelewicz/NY/FRS@FRS, Yogesh Shah/NY/FRS@FRS cc Bin Lang/NY/FRS@FRS, Brian Hefferle/NY/FRS@FRS, Caroline Nuffort/NY/FRS@FRS, Isabella Lo Piccolo/NY/FRS@FRS, Joanna Wisniecka/NY/FRS@FRS, Joshua Sherwin/NY/FRS@FRS, Kathryn Chen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS, Mayra Gonzalez/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS, Thomas J O'Keeffe/NY/FRS@FRS Afternoon Liquidity Team Update

Subject

Restricted F.R.

BOG-- FOIA 10-251 --000767

Afternoon Liquidity Team Update:
(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000768

(b)(4) & (b)(8)

************************************************ Thomas J. O'Keeffe, CFA Bank Supervision Federal Reserve Bank of New York (212)720-5568 ***********************************************

BOG-- FOIA 10-251 --000769

From: To:

Subject: Date:

Heidilynne.Schultheiss@do.treas.gov KingE@SEC.GOV; Patrick.M.Parkinson@frb.gov; Pat.White@frb.gov; Michael.Nelson@ny.frb.org; william.dudley@ny.frb.org; MLoesch@CFTC.gov; eshaw@cftc.gov; kathryn.dick@occ.treas.gov; kurt.wilhelm@occ.treas.gov Bush To Be Briefed By Financial Markets Working Group Tuesday 09/15/2008 05:01 PM

Bush To Be Briefed By Financial Markets Working Group Tuesday By Henry J. Pulizzi 15 September 2008 Dow Jones International News WASHINGTON (Dow Jones)--U.S. President George W. Bush on Tuesday will be briefed on financial-market conditions by his Working Group on Financial Markets, White House spokesman Tony Fratto said Monday. The briefing will occur after Bush returns from a trip to Houston and Galveston, Texas, where he will inspect areas damaged by Hurricane Ike. The working group is led by Treasury Secretary Henry Paulson, and includes the chairs of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Bush and Paulson met earlier Monday, as the collapse of Lehman Brothers (LEH) and the woes of American International Group (AIG) sent shudders through markets. The Dow Jones Industrial Average closed down more than 500 points, a massive sell-off propelled by investor fears over the health of the financial system. Though the working group meets regularly, Bush hasn't sat down with it since March 17, a day after the Fed provided a backstop for J.P. Morgan Chase's (JPM) purchase of Bear Stearns. Earlier Monday, Bush said the administration is working to ease any pain the market's current problems may inflict on the economy at large. "In the short run, adjustments in the financial markets can be painful - both for the people concerned about their investments, and for the employees of the affected firms," he said. "In the long run, I'm confident that our capital markets are flexible and resilient, and can deal with these adjustments."

BOG-- FOIA 10-251 --000770

From: To:

Subject: Date:

Sola Majolagbe Alexa Philo; Amy White; Anthony Cirillo; Arthur Angulo; Barbara Gorzkowski; Barbara Yelcich; Bard Stermasi; Brandon Hall; Brian Peters; Bridget Habib; Caren Cox; Caroline Frawley; Catherine A Tilford; Catherine Voigts; Chris Haley; Chris McCurdy; Christopher Calabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Denise Goodstein; Dennis Ryan; Dexter Williams; Diane Rose; Dianne Dobbeck; Genevievette.E.Walker@frb.gov; Gretchen Cappiello; H Clay Saylor; Andrea R Tokheim; Homer Hill; Jack Jennings; James Hodgetts; James Wall; Jan Voigts; Jane Majeski; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Heinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Jyoti Kohli; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kevin Clarke; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Larry Bonnemere; Laura A Macedo; Laxmi Rao; Lily Tham; Linda Rodriguez; Lisa A White; Lisa Joniaux; Lucinda M Brickler; Luis Uranga; Lydia Tshulos; Marilyn Arbuthnott; Mark Scapp; Mayra Gonzalez; Michael Johnson; Myron L Kwast; Pamela S Powell; Pat Soriano; Patrick M Parkinson; Patrick Roche; Philip Aquilino; Ralph Santasiero; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; Stacy.L.Coleman@rich.frb.org; Stanley Poszywak; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Terry Muckleroy; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas J O'Keeffe; Tim.P.Clark@frb.gov; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Update with Richard Evans on the European Market condition 09/15/2008 05:16 PM

Notes from conference with Richard Evans (Chief Risk Officer for Institutional Clients Group)
(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000771

From: To: Cc: Subject: Date: Attachments:

Philip Aquilino NY Bank Sup - LFI CPC Updates Michael Johnson; Coryann Stefansson; Nancy J Oakes; Jennifer Su; Jeffrey Plaskett; Fred Minardi; Michele Magidoff; Robert Speaks; Donna O'Kane; Teresa Curran; Steve Hoffman; David M Wright; Jon D Greenlee WFC 9/15 Update (as of 2pm PST) 09/15/2008 05:17 PM short term funding 9-12-08.xls

Restricted F.R.

Credit Risk (Philip Aquilino and Fred Minardi)
Not Responsive

(b)(4) & (b)(8)

Liquidity Risk (Jeff Plaskett and Fred Minardi)

Market Perspective
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BOG-- FOIA 10-251 --000772

Not Responsive

The latest short term funding report:

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From: To: Cc: Subject: Date:

Gustavo A Suarez JNellie Liang; William B English; Michael S Gibson; Daniel M Covitz Gustavo A Suarez AIG subs CP 09/15/2008 05:25 PM

Internal FR-Confidential We detected three unsecured financial CP programs from AIG subsidiaries in our database (the last two programs were not included in our initial report.): 1. AIG Funding Inc with $5.8 billion outstanding as of Sept. 12 ($1.9 billion coming due over the next 7 days). 2. International Lease Finance Corporation with $3.6 billion outstanding as of Sept 12 ($1.2 billion coming due over the next 7 days). 3. American General Finance Corporation with $3.3 billion outstanding as of Sept 12 ($1.1 billion coming due over the next 7 days). On Sept. 12, these three programs paid 35 to 50 basis points above the average AA financial rate to issue 30-day paper. (The AA financial rate is about 40 basis points above the average AA nonfinancial rate). In addition, AIG or affiliates sponsor two ABCP programs and one SIV with combined outstandings of $5.1 billion as of Sept. 12 ($1.9 billion coming due over the next 7 days).

BOG-- FOIA 10-251 --000777

From: To: Subject: Date: Attachments:

William R Nelson Brian F Madigan AIG memo 09/15/2008 05:27 PM AIG memo v5.doc

Here is the memo. It still says "draft." Circulate to the authors?

(b) (5)

Bill

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 (b) (6) Mobile:

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(b) (5)

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BOG-- FOIA 10-251 --000789

From: To: Subject: Date:

Mark Carey IF Officers and Section Chiefs International ramifications of an AIG failure 09/15/2008 05:29 PM

Broad-brush picture of AIG's businesses: Insurance is well over 90 percent of the consolidated business. Roughly, 50 to 60 of the insurance business is property-casualty (including reinsurance) and the remainder is life & annuity. (Breakdowns by type can only be done by revenue-type measures and the variant of accounting rules used can affect the breakdown.) About one-quarter of the property-casualty business is done outside the U.S. About 80 percent of the life & annuity business is outside the U.S. Almost all AIG's trouble is not in the insurance subsidiaries, but is caused by it's AIG Financial Products (AIGFP) derivatives and capital markets operation, which was always a relatively small part by revenue. AIG's current problem is to 1) be able to continue to raise somewhere in its corporate structure whatever soon-rolling-over debt has previously been raised by the holding company or AIGFP, and 2) be able to move requisite assets to whatever of its subs need them for posting collateral. The insurance business is essentially all done through subsidiaries, with foreign business done through foreign subsidiaries. All are regulated to one extent or another. Much like our Section 23 regulation of banks, which restricts the holding company's ability to suck capital out of bank subs for use by other subsidiaries, many insurance regulators limit transfers of wealth from insurance subs to other parts of the corporate entity. Thus the importance of the New York insurance commissioner's announcement today that AIG could temporarily take $20 billion from U.S. insurance subs for use by other parts of the consolidated entity. Now turning to international ramifications of a failure, it is hard to be 100% sure of anything because AIG naturally does not disclose all the details of its operations. My speculations:
(b) (5)

Finally, capitalization and liquidity: The equity-to-assets ratio is about 9 percent, with $96 billion of book equity. Recent press speculation of $19 billion in writeoffs is big enough to get one's attention, but given that most such writeoffs would occur in AIGFP, maybe the biggest problem is getting the capital to that entity, as noted previously.
BOG-- FOIA 10-251 --000790

A large fraction off their liabilities are reserves related to insurance products. Debt outstanding is a relatively small $176 billion relative to $1060 billion of total assets, and only $13 billion of the debt is short-term. However, as has been noted in the news, AIG has significant derivative and securities lending positions and market or rating agency sentiment can affect AIG liquidity by affecting collateral requirements and other operational aspects of these activities. Major insurance companies are fiercely complicated entities, in many ways much more complicated than major investment banks. Too bad Nini is not around anymore. He knew insurance. Mark Carey Adviser Division of International Finance Federal Reserve Board Washington, DC 20551 USA (202) 452-2784 voice (202) 872-4926 fax mark.carey@frb.gov email

BOG-- FOIA 10-251 --000791

From: To: Cc: Subject: Date: Attachments:

William R Nelson Scott Alvarez; William B English; Roberto Perli; Michael S Gibson; Jon D Greenlee Brian F Madigan; James A Clouse current draft, AIG memo 09/15/2008 05:38 PM AIG memo v5.doc

Here is the current draft of the AIG memo. Just FYI. --Bill
Attachment is a duplicate

Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 (b) (6) Mobile:

BOG-- FOIA 10-251 --000792

From: To: Cc: Subject: Date:

Paul Bhatti NY Bank Sup - LFI CPC Updates Caroline Frawley; John Reynolds; Betsy Gordon; Paul H Austin; Christopher Powell; Jordan Pollinger; Andrew Small UBS Market Risk Update 09/15/2008 05:42 PM

UBS Market Risk Update: Sept 15 @4:00PM UBS Attendees: Tom Daula (CRO-IB), Mike Jemiolo (Head MRC), David Bawden (Credit Concentration) FRBNY: Austin, Bhatti, Gordon, Reynolds, & Small. General topics
Not Responsive

(b)(4) & (b)(8)

UBS specific topics
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BOG-- FOIA 10-251 --000793

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BOG-- FOIA 10-251 --000795

From: To: Subject: Date:

David W Skidmore Michelle A Smith Fw: WSJA(9/16) US Fed Officials Likely To Hold Rates Steady 09/15/2008 05:50 PM

This reads like a signal from on high. Did they get help? -----------------------------------------------------WSJA(9/16) US Fed Officials Likely To Hold Rates Steady Monday, September 15, 2008 5:32:12 PM (GMT-04:00) Provided by: Dow Jones Capital Markets Report (From THE WALL STREET JOURNAL ASIA) By Sudeep Reddy and Jon Hilsenrath U.S. Federal Reserve officials aren't inclined to veer from plans to hold short-term interest rates steady at Tuesday's meeting, even though financial markets put rising odds on a quick rate cut following the weekend's drama on Wall Street. But concern about deteriorating markets and financial institutions could quickly prompt a change of heart among Fed officials or lead them to use their end-ofmeeting statement to open the door to more rate cuts. The case for a quick rate cut: The market turmoil could add significantly to the risk of weaker economic growth ahead. The Fed has taken pre-emptive action repeatedly over the past year, cutting interest rates as protection against a deeper economic downturn. The failure of Lehman Brothers Holdings Inc., the rapid takeover of Merrill Lynch & Co. by Bank of America Corp. and continuing concerns about insurance giant American International Group Inc. added to those. The decision depends largely on whether the market fallout, which remained limited in the U.S. early Monday, worsens on Tuesday. Fed officials expect some stress in markets. They are hoping it will remain manageable and not put too much pressure on credit conditions and the overall economic outlook. But they also recognize that markets haven't faced the failure of a major investment bank with the financial system as interconnected as it is today. Futures markets on Monday put better than 50-50 odds on the Fed cutting the current 2% federal-funds rate, at which banks lend to each other overnight, by a quarter percentage point on Tuesday. Before the weekend, traders put the likelihood at just 10%. The risk for policy makers: Cutting rates immediately could remove some of their flexibility in case the financial crisis worsens. The Fed cut rates after the market crash in 1987 -- a 25% drop in stocks -- and after the Sept. 11, 2001, terrorist attacks. But in both cases the potential turmoil was much clearer. They are likely to be resistant to taking action after less than two days of trading, when the longer-term impact on credit costs and credit availability will be unclear. The Fed previously has inserted language in its post-meeting statement to signal a willingness to take action between meetings if necessary. Those words could reemerge on Tuesday. At the very least, Fed officials are likely to suggest "increased uncertainty and increased downside risks as a result of the turmoil and the likely associated restriction of credit," UBS economists said in a note to clients. Fed officials will likely point to other action they have taken to calm financial markets. Policy makers over the past year have sought to distinguish between interest-rate policy, targeted to address economic conditions, and the Fed's lending
BOG-- FOIA 10-251 --000796

programs designed to ease short-term funding problems. The Fed expanded its lending facilities substantially on Sunday night, accepting equities as collateral for its loans. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=aprnwPJ%2Bteb%2FqWP%2B8tohNQ%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires 09-15-08 1732ET Copyright (c) 2008 Dow Jones & Company, Inc.(AP-DJ)--09-15-08 1732EDT Retrieval ID: 222861+15SEP2008+DJCM;1 Copyright © 2008 Dow Jones Capital Markets Report

BOG-- FOIA 10-251 --000797

From: To: Cc: Subject: Date: Attachments:

Donald N Gabbai John T Colwell Sabeth I Siddique CDS spreads for insurance cos. 09/15/2008 05:53 PM CDS insurance.xls

John: please include this in the report for tonight. Call it: Insurance companies and monolines. Only print tabs called: AIG, AA, a, BBB_CCC. Call me if you have any questions. I will be here for a while. Donald

BOG-- FOIA 10-251 --000798

CDS Spreads for Selected Insurance Companies July 1 2008 - September 12 2008
A+ Genworth CGNW1U5 Index 296.789 302.689 319.125 322.64 315.99 321.039 321.675 324.183 330.709 322.211 331.625 333.011 329.175 330 317.525 323.124 320.946 322.695 323.66 340.31 342.01 335.431 330.15 329.64 328.97 329.696 346.65 360.214 373.911 375 377.904 379.175 379.266 383.597 393.911 395 392.261 391.411 391.914 396.495 389.391 386.784 387.081 390.381 386.951 384.905 387.196 393.524 405.618 A+ Prudential CPRU1U5 Index 149.95 151.749 154.95 155.016 150.379 153.3 155.094 155.094 155.985 153.934 156.975 156.645 151.34 150 150.495 149.736 147.36 149.109 150 149.175 149.246 144.695 143.424 146.881 146.551 146.485 146.98 150.295 151.96 152.29 158.564 160.536 164.975 168.305 191.889 198.886 199.439 198.779 198.094 197.01 195.921 192.241 192.571 192.736 192.469 194.02 191.226 195.285 199.196 A+ MetLife CMET1U5 Index 123.3 121.65 124.546 124.546 125 124.868 121.505 122.231 122.429 120.251 123.056 124.16 122.939 123.995 122.957 124.495 122.774 123.764 124.556 128.079 127.32 130.429 130.924 130.28 130.016 129.95 139.579 142.343 142.475 143.267 147.625 153.861 153.861 160 193.44 202.211 201.246 202.005 203.325 202.566 199.439 195.982 197.071 196.094 191.545 193.921 191.556 193.041 202.739 A+ Hartford CHIG1U5 Index 114.904 117.99 121.65 121.716 120.594 119.934 120 119.769 120.066 116.436 121.957 124.929 120.784 120.586 118.086 114.401 111.949 107.906 107.5 109.916 106.581 107.279 107.213 107.165 107.165 106.34 106.066 107.254 108.023 109.673 113.361 119.952 120.787 133.333 146.336 161.221 158.35 159.835 160.561 158.251 156.931 152.099 152.99 153.98 150.99 153.564 156.336 173.011 182.046 A XL CXL1U5 Index 313.382 319.694 338.836 339.166 346.65 346.65 349.711 351.889 357.615 357.26 376.864 383.886 379.439 377.261 377.822 381.673 377.119 380.287 382.919 255.232 227.41 214.179 201.7 196.139 186.7 186.931 183.35 185.264 181.139 178.799 176.99 175.264 173.886 174.29 180.404 180.239 178.325 183.325 183.061 181.675 180.586 171.246 172.335 174.401 172.251 166.65 166.65 181.17 207.425 A Loews CLTR1U5 Index 56.708 56.972 57.774 57.807 57.495 56.835 57.845 56.855 56.855 56.02 55.949 54.784 54.355 54.053 51.01 54.086 51.751 45.835 45.736 45.538 45.538 45.505 45.934 45.934 45.401 46.495 47.089 50.635 50.876 50.579 52.221 51.83 51.83 51.599 51.83 51.929 51.746 52.241 50.485 51.716 51.815 AAAIG CAIG1U5 Index 224.239 230.155 229.594 228.142 233.198 232.274 230 232.665 240.957 239.505 247.871 251.65 245.05 242.69 225 231.345 230.256 229.736 233.325 239.711 239.33 243.325 249.678 253.828 250.33 245.726 270.759 271.419 269.67 269.228 278.194 289.211 300.66 320.082 335.214 349.381 367.599 365.165 374.282 388.325 389.769 377.789 377.789 377.789 378.218 381.617 430 438.3 437.624 446.237 467.444 662.338 858.112 1468.244 BBB+ MGIC CMTGI1U5 Index 931.438 977.4 971.493 970.635 939.209 934.226 933.617 911.502 922.508 949.406 959.421 962.061 945.1 936.058 894.227 875.575 868.231 869.221 867.341 859.651 883.311 882.321 885.424 883.929 867.46 886.446 863.404 863.369 865.644 862.542 871.487 863.799 862.874 883.662 893.921 914.96 904.763 917.7 924.96 947.752 938.512 919.577 927.67 923.049 888.714 906.996 937.422 947.52 951.682 BBB+ Assurant CAIZ1U5 Index 122 122 122 122 121.5 122.667 122.5 122.5 122.5 122.5 122.5 122.5 122.5 122.5 122.5 123.333 122.5 122.5 122.5 122.5 122.5 123 123 123.5 123.333 123.333 122.5 122.5 122.5 123.333 122.5 122.5 122.5 123.333 127.5 127.5 127.5 127.5 127.5 129 129 129 129 129 125.5 128.667 132.383 138.25 138.25 BBB+ CNA CCNAF1U5 Index 122.559 120.645 121.65 122.409 125.99 126.65 123.325 123.325 123.325 123.241 122 122.221 121.231 121.198 121.34 120.896 119.906 119.906 119.675 119.444 119.345 118.175 117.68 117.01 113.911 114.439 116.675 117.335 115 115.165 117.726 117.759 117.759 116.541 127.739 127.475 125.335 127.15 126.094 127.764 128.325 123.482 121.675 122.236 120 120.99 123.325 125.381 125.645 BBB+ PMI 7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/28/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/18/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/25/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/1/2008 9/2/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008 1385.333 1417.848 1421.671 1407.53 1399.455 1357.408 1228.838 1276.898 1346.817 1326.705 1335.312 1284.622 1250 1219.173 1191.872 1219.591 1186.533 1198.898 1205.902 1213.257 1209.87 1176.411 1207.623 1170.823 1168.162 1144.24 1122.866 1240.221 1246.471 1226.538 1204.109 1252.185 1040.08 1040.211 1071.363 1131.388 1147.643 1184.692 1172.009 1169.78 1191.867 1231.439 1216.167 1201.835 1201.257 1183.015 1176.805 1175.468 1174.49 1163.878 1196.683 1229.911 1244.585 1240.857 7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/28/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/18/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/25/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/1/2008 9/2/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008 BBB Unitrin 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5 182.5 185 185 185 185 187.5 187.5 7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/28/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/18/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/25/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/1/2008 9/2/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008 CCCFGIC 4471.99 4323.428 4505.714 4508.061 3741.667 3884.828 3804.095 3839.474 4007.349 3689.867 3526.828 3653.461 3269.373 3115.917 3127.34 3224.983 3000.357 3057.842 3102.973 3078.279 2232.585 2337.538 3260.962 2998.333 3061.833 3263.79 3046.232 3187.447 3613.324 3348.741 3499.968 3723.186 3693.847 3617.414 3636.154 3590.483 3717.594 3811.586 3699.936 3708.736 3774.308 3924.62 3350.019 3414.351 3423.658 3504.079 3561.749 3519.573 3627.03 3568.921 3605.177 4239.555 4241.827 4389.516 07/01/08 07/02/08 07/03/08 07/04/08 07/07/08 07/08/08 07/09/08 07/10/08 07/11/08 07/14/08 07/15/08 07/16/08 07/17/08 07/18/08 07/21/08 07/22/08 07/23/08 07/24/08 07/25/08 07/28/08 07/29/08 07/30/08 07/31/08 08/01/08 08/04/08 08/05/08 08/06/08 08/07/08 08/08/08 08/11/08 08/12/08 08/13/08 08/14/08 08/15/08 08/18/08 08/19/08 08/20/08 08/21/08 08/22/08 08/25/08 08/26/08 08/27/08 08/28/08 08/29/08 09/01/08 09/02/08 09/03/08 09/04/08 09/05/08 09/08/08 09/09/08 09/10/08 09/11/08 09/12/08 AASwiss Re 129.0811 127.8599 131.3794 131.1657 132.0699 136.8724 130.2962 130.1354 132.1127 129.3372 136.7355 138.2495 127.3661 124.7866 120.5618 120.6018 114.1483 114.2265 116.1801 116.0403 115.4404 113.4716 117.7387 121.9952 126.5739 124.7456 124.5788 129.1662 130.1069 127.2747 125.216 125.0913 125.1669 124.6281 123.7735 125.7743 125.5473 129.149 127.7926 127.7926 129.7629 132.511 131.6254 126.9153 128.1335 124.4172 127.2205 128.8064 131.4954 124.9603 127.1684 125.9692 129.1695 129.8391 7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/28/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/18/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/25/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/1/2008 9/2/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008 AA AMBAC 2502.194 2370.417 2242.131 2256.851 1864.966 1864.681 1495.18 1551.666 1564.107 1535.077 1652.649 1622 1574.671 1561.649 1537.42 1533.839 1478.259 1473.943 1495.886 1507.199 1429.41 1305.854 1336.277 1231.966 1249.467 1248.221 1232.962 1330.414 1335.285 1261.404 1294.794 1387.194 1392.15 1346.747 1400.993 1456.969 1493.911 1496.228 1500.538 1497.538 1505.545 1522.42 1472.79 1451.594 1449.632 1382.004 1358.113 1374.497 1379.543 1348.719 1370.035 1385.583 1406.566 1407.495 7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/28/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/18/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/25/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/1/2008 9/2/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008 AA MBIA 2262.017 2109.042 2065.463 2017.486 1816.403 1722.168 1359.684 1491.009 1503.365 1459.715 1563.874 1518.044 1470.919 1457.252 1408.924 1411.761 1400.124 1426.964 1438.78 1436.541 1338.031 1195.599 1258.905 1201.071 1198.279 1176.047 1158.121 1220.353 1187.936 1122.235 1129.526 1217.141 1186.22 1083.531 1164.249 1237.983 1238.605 1234.444 1225.554 1236.835 1233.17 1245.611 1161.603 1176.092 1182.155 1120.734 1127.864 1175.628 1182.052 1157.143 1187.052 1204.019 1203.414 1204.463

7/1/2008 Last Price

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/11/2008 8/12/2008 8/13/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/18/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/25/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/1/2008 9/2/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008 9/15/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

7/1/2008 7/2/2008 7/3/2008 7/4/2008 7/7/2008 7/8/2008 7/9/2008 7/10/2008 7/11/2008 7/14/2008 7/15/2008 7/16/2008 7/17/2008 7/18/2008 7/21/2008 7/22/2008 7/23/2008 7/24/2008 7/25/2008 7/29/2008 7/30/2008 7/31/2008 8/1/2008 8/4/2008 8/5/2008 8/6/2008 8/7/2008 8/8/2008 8/11/2008 8/12/2008 8/13/2008 8/14/2008 8/15/2008 8/19/2008 8/20/2008 8/21/2008 8/22/2008 8/26/2008 8/27/2008 8/28/2008 8/29/2008 9/3/2008 9/4/2008 9/5/2008 9/8/2008 9/9/2008 9/10/2008 9/11/2008 9/12/2008

BOG-- FOIA 10-251 --000799

CDS Spreads for AIG
1600

9/15/08 -12pm 1468.24

1400

1200

1000

800

600

400

200

0

BOG-- FOIA 10-251 --000800

CDS Spreads for A Rated Securities
450 400 350 300
Genworth

250 200 150 100 50 0

Prudential MetLife Hartford XL Loews

BOG-- FOIA 10-251 --000801

CDS Spreads for AA Securities
3000

2500

2000

AMBAC

1500

MBIA Swiss Re

1000

500

0

BOG-- FOIA 10-251 --000802

CDS Spreads for BBB & CCC Rated Securities
5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0
MGIC Assurant CNA PMI Unitrin FGIC

BOG-- FOIA 10-251 --000803

From: To: Subject: Date: Attachments:

Melissa A Vanlandingham Jeff Stehm; Jeffrey Marquardt today's update 09/15/2008 06:00 PM Infrastructure Status Report 0915 6PM.doc

Melissa Vanlandingham Financial Services Analyst Board of Governors of the Federal Reserve System Division of Reserve Bank Operations and Payment Systems 202-530-6285

BOG-- FOIA 10-251 --000804

FR Restricted Monday, September 15th 6:00 PM Infrastructure Status Report
Not Responsive

09/15/08

Page 1 of 3

BOG-- FOIA 10-251 --000805

1

FR Restricted

09/15/08

Not Responsive

(b)(4) & (b)(8) Not Responsive

(b)(4) & (b)(8)

Not Responsive

Page 2 of 3

BOG-- FOIA 10-251 --000806

2

FR Restricted

09/15/08

Not Responsive

Page 3 of 3

BOG-- FOIA 10-251 --000807

3

From: To: Cc: Subject: Date:

David H Bowman Mark Carey IF Officers and Section Chiefs Re: International ramifications of an AIG failure 09/15/2008 06:01 PM

It may be of some interest to note that one of AIG's subsidiaries is a nontrivial player in the FX spot market, acting as a broker for about $30 billion in FX trades each day, and the the sub conducts most of its trades outside of the CLS (Continuously-Linked Settlement) system, which means that if the sub failed then there could be a noticeable disruption to the FX markets. ▼ Mark Carey/BOARD/FRS
Mark Carey/BOARD/FRS

To cc Subject

IF Officers and Section Chiefs International ramifications of an AIG failure

09/15/2008 05:29 PM

Duplicate

BOG-- FOIA 10-251 --000808

From: To: Cc: Subject: Date:

Linda Rodriguez NY Bank Sup - LFI CPC Updates@FRS John Ricketti; Stephanie Chaly; Yogesh Shah; Timothy Carlin; Carol Roller; Pat Soriano; Bridget Habib; Nirali Deringer; Erika Gottfried; Christopher Hunter ZFRSSE - Barclays Liquidity/Funding Update & Charts (3pm & 5pm calls) 09/15/2008 06:03 PM

RESTRICTED FR Barclays Broker/Dealer:

Not Responsive

(b)(4) & (b)(8) Not Responsive

The next liquidity/funding call with Barclays will be Tuesday at 8:15am.

Not Responsive

BOG-- FOIA 10-251 --000809

Not Responsive

BOG-- FOIA 10-251 --000810

Not Responsive

BOG-- FOIA 10-251 --000811

From: To: Subject: Date:

(b) (4) (b) (4)

gustavo.a.suarez@frb.gov; william.dudley@ny.frb.org; william.dudley@ny.frb.org; Chris.Burke@ny.frb.org RE: CP Market Update: 09/15/2008 06:07 PM

If one more investor asks me to bid back NR or AIG I am going to scream. This has not been pleasant. Please make tomorrow a better day. Repo, Fed Fund and CP markets did not have very good days today.Very chaotic, very wide ranges, investors hunkering down cash and hiding in Tbills, Treasuries right now. Sec lenders pulling collateral. This is total chaos right now. SOMA program up to 25.8 bln vs 1.4 bln Friday. These are incredible times. (b) (4)

BOG-- FOIA 10-251 --000812

From: To: Cc:

Subject: Date:

Antonio Alvarez NY Bank Sup - LFI CPC Updates William Hilton; Louis Braunstein; William Hallacy; Glen Snajder; Rinku Shah; John Ruocco; Eric Breitweiser; Anne Chiou; Sara Mahmoud; Jacqueline Lovisa; Sola Majolagbe; Glen Reppy; Katheryn Van der Celen; Calvin Bailey; Timothy Sheridan; Christina Zausner; Steven J Manzari Citi Counterparty Update 9-15-08 PM 09/15/2008 06:08 PM

4:30 PM Discussion with Counterparty Risk Management (Tom Schwartz, Head of Counterparty Credit, & staff) and OCC.
(b)(4) & (b)(8)

D

Not Responsive

Regards, ---------------------------------------------------Antonio Alvarez Credit Risk Coordinator - Wholesale
BOG-- FOIA 10-251 --000813

Citigroup Continuous Monitoring Team Federal Reserve Bank of New York Citigroup On-site: (212) 527-1255; FRBNY Voicemail: (212) 720-5069 Blackberry: (718) 612-3095

BOG-- FOIA 10-251 --000814

From: To: Cc: Subject: Date:

Bart Simon Diane Fraser; Elise Liebers Cynthia L Martin; Kimberly A DeTrask; Stacy L Coleman AIG - other factors 09/15/2008 06:17 PM

After some brief conversations with senior insurance brokers at (b) (4) P&C - Neither have made a concrete decision on whether or not AIG is still a viable market for their clients. Both did say that most clients that are in renewal of a 10/1 inception date have asked for alternative quotes and have indicated a strong preference for the alternative. 12/31s have also asked for alternatives. - They may consider stalling any additional LOCs or payments on loss sensitive programs until more market clarity is available. - Both are highly reliant on rating agencies determination. Surety Bonds - AIG is leading provider of surety bond for construction, infrastructure, homebuilders, etc. I believe that many contracts require a minimum insurer rating on surety bond (BBB?). Should the AIG company that provides these bonds fall below that, a significant # of projects will be in technical default. I'm not sure what the process is for unwinding this. Across risks - b4 ndicated that for nonfinancial firms this was a large wake-up call. Many companies use AIG on all (many) parts of their program including P&C, 401(k), surety bonds, life insurance programs, etc. It is these smaller companies that the brokers have concern over. The larger companies may spread business and/or may loose only one part of their program. Smaller companies may have a lot of due diligence to do to replace the various services provided by AIG. - Both highlighted that their clients have been commenting on the regulatory structure. It was a wake-up call here as well.

_________________________ Bart Simon Federal Reserve Bank of Boston 600 Atlantic Avenue Boston, Massachusetts 02210 (617) 973-3231 Mailing address: Post Office Box 55882 Boston, Massachusetts 02205
BOG-- FOIA 10-251 --000815

From: To: Cc: Subject: Date:

Hasan Latif NY Bank Sup - LFI CPC Updates Dennis Ryan; Adrian Lawrence SG Market Risk Update 9/15 09/15/2008 06:18 PM

Restricted FR Market Risk Update for 9/15/08
Not Responsive

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000816

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000817

From: To: Cc: Subject: Date:

Nancy R Berlad Coryann Stefansson BSR LIG Fw: Citi Counterparty Update 9-15-08 PM 09/15/2008 06:26 PM

Cory, The key issues indicated in the email below: AIG (b) (4) and (b) (8)

Duplicate

BOG-- FOIA 10-251 --000818

From: To: Bcc: Subject: Date:

Jack Jennings Roger Cole; Deborah P Bailey; Coryann.Stefannson@frb.gov Richard.Naylor@frb.gov Summary of Foreign Supervisors Call, September 15, 4:00 p.m. 09/15/2008 06:26 PM

Summary of Foreign Supervisors Call, September 15, 4:00 p.m. Participants US - Board, FRBNY, SEC, CFTC UK - FSA, BOE Swiss - EBK Germany - Bundesbank, BaFin France - Commission Bancaire Japan - FSA Hong Kong - HK Securities and Futures Commission Not Responsive

BOG-- FOIA 10-251 --000819

Not Responsive

(b) (4)

Not Responsive

Jack P. Jennings, II Associate Director International Supervision, Training and Assistance Division of Banking Supervision and Regulation Phone: (202) 452-3053 Fax: (202) 452-2770 Email: jack.jennings@frb.gov

BOG-- FOIA 10-251 --000820

From: To: Cc: Subject: Date:

Michael S Gibson Gustavo A Suarez Daniel M Covitz; Gustavo A Suarez; JNellie Liang; William B English Re: AIG subs CP 09/15/2008 06:26 PM

I was on a phone call with FRBNY and NYSID just now, they said AIG's CP did not roll today. Mike ▼ Gustavo A Suarez/BOARD/FRS
Gustavo A Suarez/BOARD/FRS

To

09/15/2008 05:25 PM cc Subject

JNellie Liang/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Daniel M Covitz/BOARD/FRS@BOARD Gustavo A Suarez/BOARD/FRS@BOARD AIG subs CP

Duplicate

BOG-- FOIA 10-251 --000821

From: To: Cc: Subject: Date: Attachments:

Peter DeMontravel NY Bank Sup - LFI CPC Updates@FRS Pat Soriano; John Harvey; Taitu Wondwosen; Paula Premo; Peter DeMontravel; Om Arya; Jane Wakefield; Lucette Pecoraro Deutsche Bank - Treasury Liquidity Meeting - 3 PM 09/15/2008 06:28 PM Deutsche Liquidity Meeting at 3 PM.9.15.doc

Please see the attached prepared by Peter DeMontravel and Paula Premo

Peter DeMontravel Bank Supervision Group Federal Reserve Bank of New York peter.demontravel@ny.frb.org 212-720-2017

BOG-- FOIA 10-251 --000822

Restricted F.R. Liquidity Meeting at 3 PM with Deutsche Bank’s Treasury September 15, 2008 •
Not Responsive (b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --000823

Restricted F.R.
Not Responsive

BOG-- FOIA 10-251 --000824

From: To: Cc: Subject: Date: Attachments:

James Embersit Jon D Greenlee Sabeth I Siddique; Adrienne Haden; Nina Nichols Re: Update on where we stand with id of other weak firms? 09/15/2008 06:30 PM Results of Risk Area Barin storm to id institutions 9-15-08.pdf

Attached are staff briefing points on their activities today to identify institutions in various sectors that may be impacted by the Lehman or AIG "events". The objective was to identify names for ongoing monitoring.

Jim Embersit 202-452-5249 ▼ Jon D Greenlee/BOARD/FRS
Jon D Greenlee/BOARD/FRS

To cc Subject

Sabeth I Siddique/BOARD/FRS@BOARD, James Embersit/BOARD/FRS@BOARD Update on where we stand with id of other weak firms?

09/15/2008 05:57 PM

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962

BOG-- FOIA 10-251 --000825

RESTRICTED FR

NOTES ON RISK, September 15, 2008

Regional Investment Brokerage Firms The Yahoo Finance regional investment brokerage firm index was down 3.69% for the day. However, the regional brokerage firms fared better than the two remaining large brokers. Goldman and Morgan were each down over 12%. BlackRock, Inc., the largest firm in the index with a market capitalization of $27 billion, was only down about 1 percent on the day accounting for much of the good performance compared to the larger firms. Investors believe BlackRock will benefit from Lehman’s dissolution. In addition, the regional firms may not be as heavily reliant on overnight funding as the larger firms and probably do not keep complex structured products in inventory to the extent that the larger firms have. There are no indications at this time that the regional brokerage firms, as a whole, are going to come under pressure. However, a few have already encountered financial difficulty, such as ETrade and these problems have been well known for some time. The table below highlights capitalization and stock price changes for the regional brokerage firms:
Capitalization Firm Yahoo Regional Brokerage Index Select firms within the index BlackRock, Inc. TD Ameritrade Legg Mason Raymond James Company Jefferies Group Waddell & Reed Greenhill& Company Etrade Financial Knight Captial Group Friedman Billings Ramsey Symbol ^YHOh761 BLK AMTD LM RJF JEF WDR GHL ETFC NITE FBR $
(billions)

Price NA 851.82 $ 201.00 19.64 37.13 30.31 17.46 25.93 65.99 2.98 15.41 1.55 417.40 135.50 32.19

Change from 09/12/08 -3.69% -0.99% -3.68% -7.90% -2.73% 1.45% -3.71% 3.06% -9.70% -6.38% -9.88%

$ Large Brokerage Firms Goldman Sachs Morgan Stanley GS MS

27.4 11.6 5.3 3.7 2.8 2.2 1.8 1.6 1.4 0.3 58.0 51.5 34.8

$

-12.13% -13.54%

B. Valenti

BOG-- FOIA 10-251 --000826

Comparison of Morgan Stanley and Goldman Sachs CRE and Consumer Mortgage Paper
MS CRE Alt-A Prime Leveraged Loans Total: Capital: Percent of Capital $ 22.0 12.0 na 13.0 47.0 $ 34.5 136% GS $ 17.0 4.7 8.6 19.0 49.3 $ 44.8 110%

B. Valenti

Status of Insurance Industry The current problems of AIG, the financial guarantors, and the private mortgage insurers are well known. This note provides a quick update on the financial conditions of other insurance companies. U.S. insurance companies are typically highly invested in the mortgage markets, especially commercial real estate. Large U.S. insurance companies that have a substantial percentage mortgages in their invested assets include: Nationwide (22.4%); CIGNA (21.2%); Thrivent (16.6%); Genworth (16.1%); Principal Financial (16.1%); and MassMutual (16.0%). For comparison, AIG had mortgages that comprised 15.4% of its invested assets. Residential Subprime and Alt A exposures constituted a high percentage of AIG’s equity (47%). Most insurance companies are more exposed to commercial mortgages than residential. Some other insurance companies with high exposures to residential mortgages included CNA (22.7%) and The Hartford (13.4%). Insurance companies’ exposures to the CDS markets are difficult to pin down. Some evidence suggests that the most exposed are Metlife (a financial holding company), Principal Financial, Prudential, and The Hartford. This is in addition to the financial guarantors’ substantial exposures to credit markets. The largest reinsurance companies seem to be in good financial shape, although they have significant declines in profitability. The exceptions are Scottish Re, which has substantial exposure to U.S. subprime, and Bluepoint Re, which reinsured financial guarantors. Other reinsurers are parts of larger groups with financial guarantors or mortgage insurers and may face downgrades (Assured Guaranty, RAM Re, XL Capital, Radian Group). D. Fraser

BOG-- FOIA 10-251 --000827

Impact of Recent Financial Turmoil on Pension Funds • No major immediate concerns are anticipated for pension funds; however; however, heightened concerns arising from recent market events may prompt pension funds (and other fiduciaries) to selectively redeem investments in those money market funds and “stable value” funds deemed to be more vulnerable to liquidity or credit issues to protect their investment. In the longer term, effects of markdowns of pension assets may cause a plan to be underfunded, requiring a need to make additional plan contributions. 1 On the positive side, in aggregate, at 2007, private pension plans were fully funded; however, there have likely been significant write-downs in fund assets since that time. According to reports, asset values of pension funds of the top 1500 S&P companies have declined an estimated $50 - $80 billion from $1.7 trillion level at year-end 2007. The U.S. pension industry assets totaled approximately $6 trillion at year-end 2007, comprised of approximately $2.6 trillion of private plan assets and $3.4 trillion of public plan assets.

• •

Impact of Recent Financial Turmoil on Money Market Funds • Money market funds and “stable value” funds will again be under pressure to avoid “breaking the buck.” Liquidity and valuation issues are likely to become an issue. Banks sponsored funds are being monitoring by the LCBO group. (See attached listing of largest money market funds and bank advised funds.)

B. Cornyn

Most ERISA plans are required to provide audited financials. FAS 35 requires assets to be reported at fair value. The weakening of the PBGC’s financial condition following the stock market decline in 2001, was a driver of the reform implemented with the Pension Protection Act of 2006, which brought about higher funding requirements; faster closure of funding gaps; and greater use of market-to-market valuations.

1

BOG-- FOIA 10-251 --000828

Update on the Commercial Paper Market, September 15, 2008 • • • • • • • • Market is for overnight paper. Term paper is not trading in any sector, that is, for 30, 60 or 90 day paper. Money market funds are worried about redemptions and therefore, they are holding off purchasing until the end the day as opposed to purchasing in the morning. Elimination of Merrill and Lehman as dealers should not impact liquidity in the market as issuers direct their commercial paper to other dealers. Reported draws on bank lines by issuers who did not place their full allotment of commercial paper. The ABCP market is beginning to struggle. Overnight paper is difficult to place for independent issuers and foreign multi-seller ABCP conduits. Term paper did not trade. Fed Funds hit 8%. The expectation is that demand will return to the market for longer term paper as credit fears subside. US Bank spreads remained relatively unchanged, however, few trades were completed o Foreign banks could only fund overnight In the corporate market, funding was overnight with no demand for term paper.

L. Rufrano

BOG-- FOIA 10-251 --000829

CDS Spreads widened last week for AIG, as well as for A-rated insurers and FGIC. Note that Genworth, rated A, has CDS spreads comparable to BBB insurors
CDS Spreads for AIG
9/15/08 -12pm 1468.24

1600

1400

1200

1000

800

600

400

200

0

CDS Spreads for AA Securities
3000

2500

2000

AMBAC

1500

MBIA Swiss Re

1000

500

0

BOG-- FOIA 10-251 --000830

CDS Spreads for A Rated Securities
450

400

350

300
Genworth

250

Prudential MetLife Hartford

200

XL Loews

150

100

50

0

CDS Spreads for BBB & CCC Rated Securities
5000

4500

4000

3500
MGIC Assurant

3000

2500

CNA PMI Unitrin

2000

FGIC

1500

1000

500

0

D. Gabbai

BOG-- FOIA 10-251 --000831

Not Responsive

J. Colwell

BOG-- FOIA 10-251 --000832

From: To:

Subject: Date:

Patricia Mosser Patricia Mosser; Adam Ashcraft; Alejandro LaTorre; Alexa Philo; Alexander J Psomas; Azish Filabi; Bard Stermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; Danielle Vicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried; Gerard Dages; Jim Mahoney; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Min Kim; Niall E Coffey; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar; Michael S Gibson; Jon D Greenlee Re: AIG info 09/15/2008 06:32 PM

For FRBNY: no briefing for Tim. He's left for DC --FOMC meeting tomorrow. I'll send info when I get it. ----------------------------Patricia C. Mosser, FRB-NY Sent from my BlackBerry Handheld. ▼ Patricia Mosser ----- Original Message ----From: Patricia Mosser Sent: 09/15/2008 04:18 PM EDT To: Adam Ashcraft; Alejandro LaTorre; Alexa Philo; Alexander Psomas; Azish Filabi; Bard Stermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; Danielle Vicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried; Gerard Dages; Jim Mahoney; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Min Kim; Niall Coffey; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar; Michael Gibson; Jon Greenlee Subject: AIG info
----- Forwarded by Patricia Mosser/NY/FRS on 09/15/2008 04:14 PM ----"Swift, Christopher" <Christopher.Swift@aig.com> Sent by: "Turco, Antonia" <Antonia.Turco@aig.com>

To

"'HFiner@ins.state.ny.us'" <HFiner@ins.state.ny.us>, Patricia Mosser <Patricia.Mosser@ny.frb.org>, EDinallo@ins.state.ny.us JKenny@ins.state.ny.us, KBrooks@ins.state.ny.us, Joseph Fritsch <JFritsch@ins.state.ny.us>, MMoriart@ins.state.ny.us, Robert Easton <REaston@ins.state.ny.us>, Dennis Fernez <DFernez@ins.state.ny.us>, "Swift, Christopher" <Christopher.Swift@aig.com> RE: contacts

cc 09/15/2008 03:11 PM

Subject

Duplicate

BOG-- FOIA 10-251 --000833

From: To: Cc:

Subject: Date:

Alejandro LaTorre Patricia Mosser Adam Ashcraft; Alexa Philo; Alexander J Psomas; Azish Filabi; Bard Stermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; Danielle Vicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried; Gerard Dages; Jim Mahoney; Jon D Greenlee; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Michael S Gibson; Min Kim; Niall E Coffey; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar Re: AIG info 09/15/2008 06:34 PM

He just called me an asked for a briefing later tonight - we think 10-10:30. Just got the call 5min ago. ▼ Patricia Mosser/NY/FRS
Patricia Mosser/NY/FRS

To

09/15/2008 06:36 PM

Patricia Mosser/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Alexa Philo/NY/FRS@FRS, Alexander J Psomas/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS, Brian Begalle/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Danielle Vicente/NY/FRS@FRS, Denise Goodstein/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Erika Gottfried/NY/FRS@FRS, Gerard Dages/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Jonathan Polk/NY/FRS@FRS, Kevin Coffey/NY/FRS@FRS, Mari Baca/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Min Kim/NY/FRS@FRS, Niall E Coffey/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, Zoltan Pozsar/NY/FRS@FRS, Michael S Gibson/BOARD/FRS@BOARD, Jon D Greenlee/BOARD/FRS@BOARD

cc Subject Re: AIG info

Duplicate

BOG-- FOIA 10-251 --000834

From: To: Cc:

Subject: Date:

Patricia Mosser Alejandro LaTorre Adam Ashcraft; Alexa Philo; Alexander J Psomas; Azish Filabi; Bard Stermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; Danielle Vicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried; Gerard Dages; Jim Mahoney; Jon D Greenlee; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Michael S Gibson; Min Kim; Niall E Coffey; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar Re: AIG info 09/15/2008 06:35 PM

10 pm then? ----------------------------Patricia C. Mosser, FRB-NY Sent from my BlackBerry Handheld. ▼ Alejandro LaTorre ----- Original Message ----From: Alejandro LaTorre Sent: 09/15/2008 06:37 PM EDT To: Patricia Mosser Cc: Adam Ashcraft; Alexa Philo; Alexander Psomas; Azish Filabi; Bard Stermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; Danielle Vicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried; Gerard Dages; Jim Mahoney; Jon Greenlee; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Michael Gibson; Min Kim; Niall Coffey; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar Subject: Re: AIG info Duplicate

BOG-- FOIA 10-251 --000835

From: To: Cc: Subject: Date:

JNellie Liang Michael S Gibson Daniel M Covitz; Gustavo A Suarez; Michael S Gibson; William B English Re: AIG subs CP 09/15/2008 06:37 PM

Do you know if dealers took any or is it all on AIG? ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To cc

Gustavo A Suarez/BOARD/FRS@BOARD Daniel M Covitz/BOARD/FRS@BOARD, Gustavo A Suarez/BOARD/FRS@BOARD, JNellie Liang/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Re: AIG subs CP

09/15/2008 06:26 PM

Subject

I was on a phone call with FRBNY and NYSID just now, they said AIG's CP did not roll today. Mike
Duplicate

BOG-- FOIA 10-251 --000836

From: To: Cc: Subject: Date:

Timothy Carlin NY Bank Sup - LFI CPC Updates@FRS Stephanie Chaly; Linda Rodriguez; Nirali Deringer; Yogesh Shah; Christopher Hunter Barclays Ops Update 09/15/2008 06:59 PM

RESTRICTED FR Barclays Operational Update FRBNY: Tim Carlin, Linda Rodriguez, Nirali Deringer Barclays: John Rodefeld US Head of Operations (b) (4) and (b) (8)

Thanks Tim

BOG-- FOIA 10-251 --000837

From: To: Cc: Subject: Date:

James Wall NY Bank Sup - LFI CPC Updates William Charwat; Jeanmarie Davis; Brian Begalle; Genevievette.E.Walker@frb.gov Fw: Consolidated BNYM CPC Team 9/15 Recap 09/15/2008 07:20 PM

As requested, here are the consolidated bullets from the BNYM CPC team. BNYM Morning Updates
Not Responsive

(b)(4) & (b)(8)

Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000838

Not Responsive

BNYM End of Day Updates
(b)(4) & (b)(8)

Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000839

Not Responsive (b)(4) & (b)(8) Not Responsive

BOG-- FOIA 10-251 --000840

From: To: Subject: Date: Attachments:

Melissa A Vanlandingham Jeff Stehm; Jeffrey Marquardt today's update 09/15/2008 07:43 PM Infrastructure Status Report 0915 8PM.doc

Hard copies en route.

Melissa Vanlandingham Financial Services Analyst Board of Governors of the Federal Reserve System Division of Reserve Bank Operations and Payment Systems 202-530-6285

BOG-- FOIA 10-251 --000841

FR Restricted Monday, September 15th 6:00 PM Infrastructure Status Report Foreign payment and settlement infrastructures
Not Responsive

09/15/08

Page 1 of 3

BOG-- FOIA 10-251 --000842

1

FR Restricted
Not Responsive

09/15/08

(b) (4)

Not Responsive

Not Responsive

Page 2 of 3

BOG-- FOIA 10-251 --000843

2

FR Restricted
Not Responsive

09/15/08

Page 3 of 3

BOG-- FOIA 10-251 --000844

3

From: To:

Cc: Subject: Date:

Moses Cheng Alexa Philo; Amy White; Anthony Cirillo; Arthur Angulo; Barbara Gorzkowski; Barbara Yelcich; Bard Stermasi; Brandon Hall; Brian Peters; Bridget Habib; Caren Cox; Caroline Frawley; Catherine A Tilford; Catherine Voigts; Chris Haley; Chris McCurdy; Christopher Calabia; Claudia Franco; Corbin Long; Coryann Stefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Denise Goodstein; Dennis Ryan; Dexter Williams; Diane Rose; Dianne Dobbeck; Genevievette.E.Walker@frb.gov; Gretchen Cappiello; H Clay Saylor; Helen Mucciolo; Homer Hill; Jack Jennings; James Hodgetts; James Wall; Jan Voigts; Jane Majeski; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Heinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Jyoti Kohli; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kevin Clarke; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Larry Bonnemere; Laura A Macedo; Laxmi Rao; Lily Tham; Linda Rodriguez; Lisa A White; Lisa Joniaux; Lucinda M Brickler; Lydia Tshulos; Marilyn Arbuthnott; Mark Scapp; Mayra Gonzalez; Michael Johnson; Myron L Kwast; Pamela S Powell; Pat Soriano; Patrick M Parkinson; Patrick Roche; Philip Aquilino; Ralph Santasiero; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; Stacy.L.Coleman@rich.frb.org; Stanley Poszywak; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Terry Muckleroy; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas J O'Keeffe; Tim.P.Clark@frb.gov; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Richard Kunen; Pat Soriano; John Harvey; Taitu Wondwosen; Paula Premo; Peter DeMontravel; Om Arya; Jane Wakefield; Jordan Pollinger DB September 15, 2008 Credit Risk Management Update 2 09/15/2008 07:57 PM

**Restricted FR**
Prepared by Tai Wondwosen and Moses Cheng
(b)(4) & (b)(8)

Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000845

Not Responsive

************************************* Moses Cheng, CFA, FRM Federal Reserve Bank of New York 212-720-1433 212-250-6075

BOG-- FOIA 10-251 --000846

From: To: Cc: Subject: Date:

Kevin Warsh

(b) (6)

Donald L Kohn Michelle A Smith AIG 09/15/2008 08:05 PM

Received report tonight on capital hole at AIG; far worse than expected; hole too big (b) (4) to be filled, according to . Not good.

BOG-- FOIA 10-251 --000847

From: To: Subject: Date:

Michelle A Smith Kevin Warsh; (b) (6) Re: AIG 09/15/2008 08:25 PM

; Donald L Kohn; Brian F Madigan

Just spoke to TFG.

(b) (5) (b) (5)

▼ Kevin Warsh ----- Original Message ----From: Kevin Warsh Sent: 09/15/2008 08:05 PM EDT To: (b) (6) Donald Kohn Cc: Michelle Smith

Duplicate

BOG-- FOIA 10-251 --000848

From: To: Subject: Date:

Rita C Proctor

(b) (6)
Fw: Foreign Bank Supervisors call 09/15/2008 08:30 PM

Deborah P Bailey/BOARD/FRS

To

09/15/2008 07:19 PM cc Subject

Rita C Proctor/BOARD/FRS@BOARD, Randall S Kroszner/BOARD/FRS@BOARD, Elizabeth A Duke/BOARD/FRS@BOARD, Donald L Kohn/BOARD/FRS@BOARD, Kevin Warsh/BOARD/FRS@BOARD Scott Alvarez/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD Foreign Bank Supervisors call

Duplicate

BOG-- FOIA 10-251 --000849

From: To: Subject: Date: Attachments:

Melissa A Vanlandingham Jeff Stehm; Jeffrey Marquardt lehman update draft 09/15/2008 08:33 PM Infrastructure Status Report 0915 830PM.doc

Melissa Vanlandingham Financial Services Analyst Board of Governors of the Federal Reserve System Division of Reserve Bank Operations and Payment Systems 202-530-6285

BOG-- FOIA 10-251 --000850

FR Restricted Monday, September 15th 8:30 PM Infrastructure Status Report
Not Responsive

09/15/08

(b)(4) & (b)(8)

Not Responsive

Page 1 of 3

BOG-- FOIA 10-251 --000851

1

FR Restricted
Not Responsive

09/15/08

Page 2 of 3

BOG-- FOIA 10-251 --000852

2

FR Restricted
Not Responsive

09/15/08

Page 3 of 3

BOG-- FOIA 10-251 --000853

3

From: To: Cc: Subject: Date:

Brian F Madigan Michelle A Smith Donald L Kohn; (b) (6) Re: AIG 09/15/2008 08:47 PM

; Kevin Warsh; Scott Alvarez

Here are my thoughts.
(b) (5)

▼ Michelle A Smith/BOARD/FRS
Michelle A Smith/BOARD/FRS

To

09/15/2008 08:25 PM cc Subject

Kevin Warsh/BOARD/FRS@BOARD, (b) (6) Donald L Kohn/BOARD/FRS@BOARD, Brian F Madigan/BOARD/FRS@BOARD

Re: AIG

Duplicate

BOG-- FOIA 10-251 --000854

From: To: Cc: Subject: Date:

Michelle A Smith Brian F Madigan Donald L Kohn; (b) (6) Re: AIG 09/15/2008 08:59 PM

; Kevin Warsh; Scott Alvarez

Latest...

(b) (5)

-m ▼ Brian F Madigan ----- Original Message ----From: Brian F Madigan Sent: 09/15/2008 08:47 PM EDT To: Michelle Smith Cc: Donald Kohn; (b) (6) Subject: Re: AIG

Kevin Warsh; Scott Alvarez

Here are my thoughts.

Duplicate

BOG-- FOIA 10-251 --000855

From: To: Subject: Date:

Patrick M Parkinson JNellie Liang Re: Fw: Difficulties with money fund redemptions 09/15/2008 09:03 PM

No, but no surprise there.

Pat

----- Original Message ----From: JNellie.Liang Sent: 09/15/2008 09:00 PM AST To: Patrick Parkinson Subject: Re: Fw: Difficulties with money fund redemptions

thanks. I assume you heard that AIG's CP did not roll today. Nellie

Patrick.M.Parkins on@frb.gov To 09/15/2008 08:36 PM

"Brian Madigan" <brian.f.madigan@frb.gov>, "Nellie Liang" <JNellie.Liang@frb.gov> cc Subject Fw: Difficulties with money fund redemptions

Fyi.

----- Original Message ----From: David.Marshall Sent: 09/15/2008 08:37 PM AST To: Pat White; Patrick Parkinson; Patricia Mosser Subject: Difficulties with money fund redemptions

Not Responsive

BOG-- FOIA 10-251 --000856

From: To: Cc: Subject: Date:

Brian F Madigan Michelle A Smith Donald L Kohn; (b) (6) Re: AIG 09/15/2008 09:05 PM

; Kevin Warsh; Scott Alvarez; Brian F Madigan

Scott and I just spoke by phone. (b) (5)

▼ Michelle A Smith/BOARD/FRS
Michelle A Smith/BOARD/FRS

To cc

Brian F Madigan/BOARD/FRS@BOARD Donald L Kohn/BOARD/FRS@BOARD, (b) (6) Kevin Warsh/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD Re: AIG

09/15/2008 08:59 PM Subject

Duplicate

BOG-- FOIA 10-251 --000857

From: To: Subject: Date:

Scott Alvarez Michelle A Smith Re: AIG 09/15/2008 09:06 PM

(b) (5)

Scott -------------------------Sent from my BlackBerry Wireless Handheld ▼ Michelle A Smith ----- Original Message ----From: Michelle A Smith Sent: 09/15/2008 08:59 PM EDT To: Brian Madigan Cc: Donald Kohn; (b) (6) ; Kevin Warsh; Scott Alvarez

Duplicate

BOG-- FOIA 10-251 --000858

From: To: Subject: Date:

Michelle A Smith

(b) (6)

Donald L Kohn; Kevin Warsh; Brian F Madigan; Scott Alvarez S and P cuts AIG's credit rating... 09/15/2008 09:26 PM

NEWS ALERT from The Wall Street Journal Sept. 15, 2008 Monday evening, Standard & Poor's cut AIG's credit rating by three notches. The downgrade means that AIG's counterparties can demand that it post an additional $11.6 billion in collateral, according to a filing AIG made with the Securities and Exchange Commission in August. It is not clear how quickly AIG would have to produce those funds, but if it fails to do so, it risks defaulting on its agreements with those counterparties.

BOG-- FOIA 10-251 --000859

From: To: Subject: Date:

Donald L Kohn Scott Alvarez; Patrick Parkinson Fw: AIG 09/15/2008 09:38 PM

(b) (5)

-------------------------Sent from my BlackBerry Wireless Handheld ▼ Kevin Warsh ----- Original Message ----From: Kevin Warsh Sent: 08:05 PM EDT To: (b) (6) Donald Kohn Cc: Michelle Smith Subject: AIG

Duplicate

BOG-- FOIA 10-251 --000860

From: To: Subject: Date:

Coryann Stefansson Brian Peters What was the outcome of the aig meeting? 09/15/2008 11:58 PM

Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # (b) (6)

BOG-- FOIA 10-251 --000861

From: To: Subject: Date:

Coryann Stefansson Brian Peters Re: What was the outcome of the aig meeting? 09/16/2008 12:09 AM

Any...starved for info :) Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 2 Cell # (b) (6) ----- Original Message ----From: Brian Peters Sent: 09/16/2008 12:12 AM EDT To: Coryann Stefansson Subject: Re: What was the outcome of the aig meeting?

Our internal discussion or the industry? Both still ongoing to my knowledge.

Duplicate

BOG-- FOIA 10-251 --000862

From: To: Subject: Date:

Coryann Stefansson Brian Peters Re: What was the outcome of the aig meeting? 09/16/2008 12:21 AM

(b) (5)
Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 2 Cell # (b) (6)

----- Original Message ----From: Brian Peters Sent: 09/16/2008 12:17 AM EDT To: Coryann Stefansson Subject: Re: What was the outcome of the aig meeting?

We are still debating with TFG. A group with Dianne and Stev and wlr directing are estimating the economic effects on the market. Some bankers seem to still be downstarirs as tFG keeps popping out.

----- Original Message ----From: Coryann Stefansson Sent: 09/16/2008 12:09 AM EDT To: Brian Peters Subject: Re: What was the outcome of the aig meeting?

Duplicate

BOG-- FOIA 10-251 --000863

Coryann Stefansson Associate Director Bank Supervision and Regulation Work # Cell # (b) (6)

BOG-- FOIA 10-251 --000864

From: To: Subject: Date: Attachments:

Robert.Hoyt@do.treas.gov Dan.Jester@do.treas.gov; Jeremiah.Norton@do.treas.gov; Neel.Kashkari@do.treas.gov; David.McCormick@do.treas.gov; Tony.Ryan@do.treas.gov; Scott.Alvarez@frb.gov; Timothy.Geithner@ny.frb.org Fw: Use of existing Authority 09/16/2008 12:47 AM Use of existing Authority.doc

From: Bob Hoyt To: Hoyt, Robert Sent: Tue Sep 16 00:43:26 2008 Subject: Use of existing Authority
(b) (5)

·····

- Use of existing Authority.doc

BOG-- FOIA 10-251 --000865

(b) (5)

BOG-- FOIA 10-251 --000866

From: Sent By: To: Subject: Date:

(b) (4)
James.A.Clouse@frb.gov Few things 09/16/2008 06:05 AM

It seems many in the market were not at all prepared for Lehman to go under. Most expected some form of takeover or bail out (maybe not the most irrational of beliefs given Bear Stearns and the potential for serious systemic risk).

A lot of funds facing Lehman have seen significant losses incurred on collateral on repo’s, swaps, etc. There are also many with uncertain overall positions as a result of uncertainty over current trades with Lehman.

Given that the UShas now showed a willingness to let a major institution fail, there is widespread concern about many other names, and an increasing unwillingness to lend or trade with other counterparties.

I have heard a number of funds raise concerns about whether the Merrill/BoA deal with conclude (people who’ve just incurred serious losses on Lehman exposures are inclined to take a negative view of things).

Similarly AIG is causing high concern – the extent of losses which would be transmitted to the banking system through a failure is seen as a very high risk.

The money markets and FX forward markets are becoming increasingly dislocated – US$ overnight rates being quoted somewhere between 10+20% at present.

BOG-- FOIA 10-251 --000867

Credit spreads across the board are continuing to blow out, and liquidity is extremely poor.

The very very high risk decision to let Lehman fail seems to be triggering a loss of confidence in policy makers ability to understand or fix the current problems (at least in the US). If this runs much further or there are other major defaults this situation could be difficult to pull back.

I would not rule out the need for the US or even G7 to issue a generalized guarantee on all senior bank obligations if this situation gets further out of hand to prevent a major systemic breakdown in the banking and payments system.

Feel free to give me a shout for further.

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000868

From: To: Subject: Date:

(b) (6)
Michelle A Smith; Kevin Warsh Re: S and P cuts AIG's credit rating... 09/16/2008 06:19 AM

(b) (5) -------------------------Sent from my BlackBerry Wireless Handheld ▼ Michelle A Smith ----- Original Message ----From: Michelle A Sent: 09/15/2008 To: (b) (6) Alvarez Subject: S and P Smith 09:26 PM EDT ; Donald Kohn; Kevin Warsh; Brian Madigan; Scott cuts AIG's credit rating...

NEWS ALERT from The Wall Street Journal Sept. 15, 2008

Monday evening, Standard & Poor's cut AIG's credit rating by three notches. The downgrade means that AIG's counterparties can demand that it post an additional $11.6 billion in collateral, according to a filing AIG made with the Securities and Exchange Commission in August. It is not clear how quickly AIG would have to produce those funds, but if it fails to do so, it risks defaulting on its agreements with those counterparties.

BOG-- FOIA 10-251 --000869

From: To: Subject: Date:

Kevin Warsh Donald L Kohn Fw: S and P cuts AIG's credit rating... 09/16/2008 06:28 AM

--------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: (b) (6) Sent: 09/16/2008 06:19 AM AST To: Michelle Smith; Kevin Warsh Subject: Re: S and P cuts AIG's credit rating...

Duplicate

BOG-- FOIA 10-251 --000870

From: To: Subject: Date:

Donald L Kohn Kevin Warsh Re: S and P cuts AIG's credit rating... 09/16/2008 06:37 AM

We already were supposed to have an u gets scheduled and that bb is on it. (b)

ure that

-------------------------Sent from my BlackBerry Wireless Handheld

(b) (5)

(5)

----- Original Message ----From: Kevin.Warsh Sent: 09/16/2008 06:28 AM AST To: Donald Kohn Subject: Fw: S and P cuts AIG's credit rating...

--------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

----age ----From: (b) (6) Sent: 09/16/2008 06:19 AM AST To: Michelle Smith; Kevin Warsh Subject: Re: S and P cuts AIG's credit rating...

Duplicate

BOG-- FOIA 10-251 --000871

From: To: Subject: Date:

Michelle A Smith

(b) (6)
Fw: S and P cuts AIG's credit rating... 09/16/2008 06:39 AM

▼ (b) (6)

BB would like to get an update before thew mtg. Do ypu want me to put tgether a 5 min call at 8 or 815? Good luck. ----- Original Message ----From: (b) (6) Sent: 09/16/2008 06:19 AM EDT To: Michelle Smith; Kevin Warsh

Duplicate

BOG-- FOIA 10-251 --000872

From: To: Subject: Date:

Michelle A Smith

(b) (6)
Re: S and P cuts AIG's credit rating... 09/16/2008 06:53 AM

(b) (6)

Done ----- Original Message -----

From: (b) (6) Sent: 09/16/2008 06:19 AM EDT To: Michelle Smith; Kevin Warsh Subject: Re: S and P cuts AIG's credit rating... Duplicate

BOG-- FOIA 10-251 --000873

From: Sent By: To: Subject: Date:

(b) (4)
sheetsn@frb.gov problem 09/16/2008 07:26 AM

I really think you have a major problem here.

Lehman failure has set of a huge set of chain reactions across markets causing leverage to unwind in a disorderly manner. Many funds/corporates/hedge funds can’t work out their positions and are scrambling to replace naked exposures created by the failure. There seem to be differences in treatment for the unwind depending on instruments, etc causing chaos for market exposures.

The ETF market is being shut down by the AIG problems.

The USsenior bank debt market is collapsing due to the collapse in recovery rate assumptions as more failures are considered.

Most important is the collapse in confidence in the policymaker community among market participants. It was a choice to let Lehman fail and trigger this situation.

The market is very close to seizing. Many market participants are close to a moving towards short dated government bonds and avoiding bank exposure (in every way a major run on the banking system).

There may well be a need to issue a general guarantee on bank obligations in the manner the Scandanavian’s did in 2002 and the UK did for a short period during
BOG-- FOIA 10-251 --000874

Northern Rock’s collapse to prevent the payments system collapsing in the next few hours.

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000875

From: To: Subject: Date:

Margaret Owens Kevin Warsh Fw: Few things 09/16/2008 07:40 AM

----- Forwarded by Margaret Owens/BOARD/FRS on 09/16/2008 07:39 AM -----

(b) (4)
To cc Subject 09/16/2008 06:35 AM Few things <Margaret.Owens@frb.gov>

Hi – would you be able to pass this to Gov Warsh for me please? Thanks,(b) (4)

It seems many in the market were not at all prepared for Lehman to go under. Most expected some form of takeover or bail out (maybe not the most irrational of beliefs given Bear Stearns and the potential for serious systemic risk). A lot of funds facing Lehman have seen significant losses incurred on collateral on repo’s, swaps, etc. There are also many with uncertain overall positions as a result of uncertainty over current trades with Lehman. Given that the US has now showed a willingness to let a major institution fail, there is widespread concern about many other names, and an increasing unwillingness to lend or trade with other counterparties. I have heard a number of funds raise concerns about whether the Merrill/BoA deal with conclude (people who’ve just incurred serious losses on Lehman exposures are inclined to take a negative view of things). Similarly AIG is causing high concern – the extent of losses which would be transmitted to the banking system through a failure is seen as a very high risk. The money markets and FX forward markets are becoming increasingly dislocated – US$ overnight rates being quoted somewhere between 10+20% at present.

BOG-- FOIA 10-251 --000876

Credit spreads across the board are continuing to blow out, and liquidity is extremely poor. The very very high risk decision to let Lehman fail seems to be triggering a loss of confidence in policy makers ability to understand or fix the current problems (at least in the US). If this runs much further or there are other major defaults this situation could be difficult to pull back. I would not rule out the need for the US or even G7 to issue a generalized guarantee on all senior bank obligations if this situation gets further out of hand to prevent a major systemic breakdown in the banking and payments system. Feel free to give me a shout for further. (b) (4)

(b) (4)

BOG-- FOIA 10-251 --000877

From: To: Subject: Date:

Patrick E McCabe Patrick Dwyer AIG & MMFs? 09/16/2008 07:47 AM

Patrick: Any news on the AIG situation as it affects MMFs? (b) (5)

-Patrick ▼ Patrick Dwyer/NY/FRS@FRS
Patrick Dwyer/NY/FRS@FRS

To cc Subject

Patrick E McCabe/BOARD/FRS@BOARD Fw: dmm for pm

09/15/2008 02:35 PM

from our 1:30 rundown:
----- Forwarded by Patrick Dwyer/NY/FRS on 09/15/2008 02:34 PM ----Patrick Dwyer/NY/FRS

To cc

Kenneth Forgit/NY/FRS, Matthew Lieber/NY/FRS, Jason Miu/NY/FRS, Michelle Steinberg/NY/FRS Steven Friedman/NY/FRS@FRS, Peggy Kauh/NY/FRS@FRS, NY MKT DMM Staff, Seth B Carpenter/BOARD/FRS@BOARD dmm for pm

09/15/2008 01:23 PM

Subject

Not Responsive

BOG-- FOIA 10-251 --000878

Not Responsive

BOG-- FOIA 10-251 --000879

From: To: Subject: Date:

JNellie Liang Gustavo A Suarez; Daniel M Covitz Re: AIG subs CP 09/16/2008 07:56 AM

I suspect that AIG's CP backup lines have MAC clauses, and that AIG now has a serious problem. I would like to consolidate the info you have put together on AIG's programs and give a short memo to BB today. Let's get the story about any rates paid on their CP yesterday. Nellie ▼ Michael S Gibson/Board/FRS
Michael S Gibson/Board/FRS Sent by: Michael S Gibson/BOARD/FRS

To cc Subject

JNellie Liang/BOARD/FRS@BOARD

Re: AIG subs CP

09/15/2008 07:21 PM

They didn't say. It is my understanding that the CP has bank backup lines, though the ABCP does not. Mike ▼ JNellie Liang/BOARD/FRS
JNellie Liang/BOARD/FRS

To cc

Michael S Gibson/BOARD/FRS@BOARD Daniel M Covitz/BOARD/FRS@BOARD, Gustavo A Suarez/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD Re: AIG subs CP

09/15/2008 06:37 PM Subject

Duplicate

BOG-- FOIA 10-251 --000880

From: To: Cc: Subject: Date:

JNellie Liang Gustavo A Suarez Daniel M Covitz; Gustavo A Suarez; Michael S Gibson; JNellie Liang Re: AIG subs CP 09/16/2008 08:03 AM

Gustavo, If I have it right by combining this info with previous data, AIG and subs have six programs with $17.9 billion. $6 billion or one-third is due to mature in 7 days (5 business days?). Mike tells us that NY said that their paper did not roll yesterday. Nellie ▼ Gustavo A Suarez/BOARD/FRS
Gustavo A Suarez/BOARD/FRS

To

09/15/2008 05:25 PM cc Subject

JNellie Liang/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Daniel M Covitz/BOARD/FRS@BOARD Gustavo A Suarez/BOARD/FRS@BOARD AIG subs CP

Duplicate

BOG-- FOIA 10-251 --000881

From: To: Cc: Subject: Date:

Roberto Perli Brian F Madigan James A Clouse; William B English; William R Nelson; Seth B Carpenter liquidity conditions yesterday from CPCs 09/16/2008 08:05 AM

This is a brief summary of what FRBNY's CPC teams learned about liquidity conditions yesterday from their respective institutions.
Not Responsive

Money Funds

Not Responsive
(b)(4) & (b)(8)

noted that one fund--Reserve Funds--had a large amount of Lehman and AIG exposure and will probably ‘break the buck’ (trade below $1) and need to be acquired by an outside party.

BOG-- FOIA 10-251 --000882

From: To: Subject: Date:

James A Clouse Deborah P Bailey; Coryann Stefansson Fw: liquidity conditions yesterday from CPCs 09/16/2008 08:08 AM

Just FYI...Interesting note on the money fund situation....easier to understand why those funds were experiencing major redemption requests! Jim jclouse@frb.gov (b) (6) cell: blackberry: 202-390-3521

----- Forwarded by James A Clouse/BOARD/FRS on 09/16/2008 08:08 AM ----Roberto Perli/BOARD/FRS

To cc

Brian F Madigan/BOARD/FRS@BOARD James A Clouse/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, William R Nelson/BOARD/FRS@BOARD, Seth B Carpenter/BOARD/FRS@BOARD liquidity conditions yesterday from CPCs

09/16/2008 08:05 AM Subject

Duplicate

BOG-- FOIA 10-251 --000883

From: To: Subject: Date:

Coryann Stefansson James A Clouse; Deborah P Bailey Re: liquidity conditions yesterday from CPCs 09/16/2008 08:29 AM

Hey Thanks for the forward. I just want to put a caveat out that
(b) (5)

Cory Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # (b) (6) ▼ James A Clouse ----- Original Message ----From: James A Clouse Sent: 09/16/2008 08:08 AM EDT To: Deborah Bailey; Coryann Stefansson Subje Duplicate

----- Forwar

BOG-- FOIA 10-251 --000884

From: To: Subject: Date:

Meg McConnell Patrick M Parkinson; Beverly Hirtle Re: Fw: legislative agenda 09/16/2008 08:34 AM

(b) (5)

Margaret M. McConnell Federal Reserve Bank of New York 212-720-8773 ▼ Patrick M Parkinson ----- Original Message ----From: Patrick M Parkinson Sent: 09/16/2008 08:24 AM EDT To: Beverly Hirtle Cc: Meg McConnell Subject: Re: Fw: legislative agenda

Various people (not me) were working on this through the night. I've not seen what they produced. Meg is likely to know more.

Pat ▼ Beverly Hirtle/NY/FRS@FRS
Beverly Hirtle/NY/FRS@FRS

To cc Subject

Patrick M Parkinson/BOARD/FRS@BOARD Meg McConnell/NY/FRS Fw: legislative agenda

09/16/2008 08:22 AM

Pat, I volunteered to help organize FRBNY participation on these efforts. Is there someone I could talk to (you?) for a few minutes to get some more information about what's going on? Thanks. Bev Beverly Hirtle Senior Vice President Financial Intermediation Function Federal Reserve Bank of New York (212) 720-7544
----- Forwarded by Beverly Hirtle/NY/FRS on 09/16/2008 08:21 AM ----Meg McConnell/NY/FRS To 09/15/2008 02:07 PM cc Subject Fw: legislative agenda Beverly Hirtle/NY/FRS@FRS

Hi Bev, I haven't had a chance to look through this yet, but here is what Pat forwarded
BOG-- FOIA 10-251 --000885

me on this. I guess this question is how/who at FRBNY could work on some or all of these with Board staff in the near-term. Some of it we may have already thought through in some form or another. Meg
----- Forwarded by Meg McConnell/NY/FRS on 09/15/2008 01:59 PM ----Patrick.M.Parkinson@frb.gov To 09/15/2008 09:07 AM cc Subject Fw: legislative agenda "Meg McConnell" <Meg.McConnell@ny.frb.org>

Please strictly limit distribution. Thanks. Pat ----- Original Message ----From: Donald L Kohn Sent: 09/15/2008 08:51 AM EDT To: Patrick Parkinson Subject: Fw: legislative agenda ----- Forwarded by Donald L Kohn/BOARD/FRS on 09/15/2008 08:51 AM ----Donald L Kohn/BOARD/FRS To
(b) (6)

01:34 PM

(b) (6)

cc brian.f.madigan@frb.gov, Kevin Warsh/BOARD/FRS@Board, Scott Alvarez/BOARD/FRS@Board, Timothy Geithner/NY/FRS@FRS, Donald L Kohn/BOARD/FRS Subject Re: legislative agenda(Document link: Donald L Kohn)

cleaned up 1c. along the lines Ben suggested. (See attached file: Possible Legislative Proposals.doc)

BOG-- FOIA 10-251 --000886

(b) (6)

To 09/14/2008 01:23 Kohn/BOARD/FRS@BOARD PM cc L Kohn/BOARD/FRS@BOARD, Kevin Warsh/BOARD/FRS@BOARD, Scott Alvarez/BOARD/FRS@BOARD, Timothy Geithner/NY/FRS@FRS Subject Re: legislative agenda(Document link: Donald L Kohn) Donald L

brian.f.madigan@frb.gov, Donald

Thanks.

(b) (5)

Donald L Kohn/BOARD/FRS To
(b) (6)

:14

(b) (6)

PM Warsh/BOARD/FRS@BOARD, Geithner/NY/FRS@FRS cc

Kevin Timothy

brian.f.madigan@frb.gov, Scott Alvarez/BOARD/FRS@BOARD, Donald L Kohn/BOARD/FRS Subject legislative agenda

BOG-- FOIA 10-251 --000887

here's my list of possible legislation.

(b) (5)

(b) (5)
[attachment "Possible Legislative Proposals.doc" deleted by Donald L Kohn/BOARD/FRS]

[attachment "Possible Legislative Proposals.doc" deleted by Meg McConnell/NY/FRS]

BOG-- FOIA 10-251 --000888

From: To: Subject: Date:

Michael S Gibson Gustavo A Suarez Re: AIG subs CP 09/16/2008 08:44 AM

Gustavo, not sure if you checked all of these: Moody's has downgraded the following ratings and assigned a negative outlook: AIG Capital Corporation -- short-term issuer rating to Prime 2 from Prime 1; American General Finance Corporation -- short-term debt to Prime 2 from Prime-1; American General Finance, Inc. -- short-term debt to Prime-2 from Prime-1; CommoLoco, Inc. -- backed short-term debt to Prime-2 from Prime-1; International Lease Finance Corporation -- short-term debt to Prime-2 from Prime-1. Moody's has placed the following ratings on review for possible downgrade: American International Group, Inc. -- short-term issuer rating at Prime1; AIG Financial Products Corp. -- backed short-term debt at Prime-1; AIG Funding, Inc. -- backed short-term debt at Prime-1; AIG General Insurance (Taiwan) Co., Ltd. -- insurance financial strength at A1; AIG Liquidity Corp. -- backed short-term debt at Prime-1;

BOG-- FOIA 10-251 --000889

AIG Matched Funding Corp. -- backed short-term debt at Prime-1; Mike

▼ Gustavo A Suarez/BOARD/FRS
Gustavo A Suarez/BOARD/FRS

To

09/15/2008 05:25 PM cc Subject

JNellie Liang/BOARD/FRS@BOARD, William B English/BOARD/FRS@BOARD, Michael S Gibson/BOARD/FRS@BOARD, Daniel M Covitz/BOARD/FRS@BOARD Gustavo A Suarez/BOARD/FRS@BOARD AIG subs CP

Duplicate

BOG-- FOIA 10-251 --000890

From: To: Subject: Date: Importance:

Scott Alvarez Robert Hoyt Re: Use of existing Authority 09/16/2008 08:55 AM High

Bob
(b) (5)

Thanks! Scott -------------------------Sent from my BlackBerry Wireless Handheld

From: Robert.Hoyt Sent: 09/16/2008 12:47 AM AST To: Dan.Jester@do.treas.gov; Jeremiah.Norton@do.treas.gov; Neel.Kashkari@do.treas.gov; David.McCormick@do.treas.gov; Tony.Ryan@do.treas.gov; Scott Alvarez; Timothy Geithner Subject: Fw: Use of existing Authority

From: Bob Hoyt To: Hoyt, Robert Sent: Tue Sep 16 00:43:26 2008 Subject: Use of existing Authority
Duplicate

BOG-- FOIA 10-251 --000891

From: To: Subject: Date: Attachments:

JNellie Liang Daniel M Covitz; Gustavo A Suarez draft 09/16/2008 08:55 AM AIG.cp.091608.doc

BOG-- FOIA 10-251 --000892

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000893

From: To: Subject: Date:

(b) (5)

Kevin Warsh

09/16/2008 08:56 AM

In fomc meeting by can u email me your views on the liquidity need and capital need by aig. Want to make sure treas has clear understanding of difference ---------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000894

From: To: Subject: Date:

Robert.Hoyt@do.treas.gov Scott.Alvarez@frb.gov Re: Use of existing Authority 09/16/2008 08:56 AM

(b) (5)

From: Scott.Alvarez@frb.gov To: Hoyt, Robert Sent: Tue Sep 16 08:55:43 2008 Subject: Re: Use of existing Authority

Bob
Duplicate

BOG-- FOIA 10-251 --000895

From: To: Subject: Date:

Jon D Greenlee Sabeth I Siddique; James Embersit; Nina Nichols; Adrienne Haden Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte) 09/16/2008 09:02 AM

Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Brad Evans/RICH/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/16/2008 09:01 AM -----

To cc

NY Banksup LFI CPC Jennifer Burns/RICH/FRS@FRS, Lisa A White, Nancy R Berlad/BOARD/FRS@BOARD Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte)

09/16/2008 08:52 AM

Subject

Briefing email: BAC - Overview of Enterprise actions (Meeting Senior Enterprise Executive Cmte) 7.30am Key Contacts: Arrington Mixon, Ed O'Keefe
Not Responsive

(b)(4) & (b)(8)

Best Regards, Brad Evans Federal Reserve

BOG-- FOIA 10-251 --000896

From: To: Subject: Date: Attachments:

JNellie Liang Daniel M Covitz; Gustavo A Suarez revised draft 09/16/2008 09:04 AM AIG.cp.091608.doc

BOG-- FOIA 10-251 --000897

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000898

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --000899

From: To: Subject: Date:

Kevin Warsh Michelle A Smith 09/16/2008 09:13 AM

(b) (5) ---------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000900

From: To: Subject: Date:

Michelle A Smith Calvin Mitchell 09/16/2008 09:19 AM

(b) (5)

BOG-- FOIA 10-251 --000901

From: To:

Subject: Date:

Todd.Waszkelewicz@ny.frb.org Marsha Takagi; Jeanmarie Davis; Che.Sidanius@ny.frb.org; Jeremy.Gagne@ny.frb.org; William.Johnson@ny.frb.org; Jeffrey Marquardt; Theodore Lubke; Jeff Stehm; Roger Graham; Lawrence.Sweet@ny.frb.org Today's outlook for CLS 09/16/2008 09:23 AM

FR Restricted:

Not Responsive

(b)(4) & (b)(8)
I hope to get another update in an hour after the Citi talks. Thanks. ----------------Sent from my BlackBerry Handheld.

BOG-- FOIA 10-251 --000902

From: To: Subject: Date:

Kevin Warsh dan.jester@do.treas.gov In fomc mtg 09/16/2008 09:31 AM

Dan (b) (5) Kevin ---------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld Thx

BOG-- FOIA 10-251 --000903

From: To: Subject: Date:

Dan.Jester@do.treas.gov Kevin.Warsh@frb.gov Re: In fomc mtg 09/16/2008 09:44 AM

(b) (5)

----- Original Message ----From: Kevin.Warsh@frb.gov <Kevin.Warsh@frb.gov> To: Jester, Dan (Contractor) Sent: Tue Sep 16 09:31:20 2008 Subject: In fomc mtg Dan
Duplicate

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From: To: Subject: Date: Attachments:

Rich Ashton Mark VanDerWeide; Sophia H Allison Resolution attached 09/16/2008 09:50 AM AIG resolution II.doc

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(b) (5)

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From: To: Subject: Date:

(b) (4)
kevin.warsh@frb.gov Re: 09/16/2008 09:54 AM

Market in distress. AIG is creating fear. Banks stopping taking names. CDS much wider. ----- Original Message ----From: Kevin Warsh@frb.gov <Kevin.Warsh@frb.gov> To: (b) (4) Sent: Tue Sep 16 09:35:05 2008 Mkt developments this am pls by emal ---------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

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From: To: Subject: Date:

Jack Jennings Coryann Stefansson Re: Fw: AIG & Identifying other firms under stress 09/16/2008 09:57 AM

are you on call, they are reviewing the aig info with foreign supervisors Jack P. Jennings, II Associate Director International Supervision, Training and Assistance Division of Banking Supervision and Regulation Phone: (202) 452-3053 Fax: (202) 452-2770 Email: jack.jennings@frb.gov ▼ Coryann Stefansson/BOARD/FRS
Coryann Stefansson/BOARD/FRS

To cc Subject

Jack Jennings/BOARD/FRS@BOARD Fw: AIG & Identifying other firms under stress

09/15/2008 10:34 PM

Duplicate

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From: To: Subject: Date:

Kevin Warsh Dan Jester Re: In fomc mtg 09/16/2008 09:58 AM

(b) (5) Is it your view tha ? ---------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

From: Dan.Jester Sent: 09/16/2008 09:44 AM AST To: Kevin Warsh Subject: Re: In fomc mtg
Duplicate

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From: To: Cc: Subject: Date: Attachments:

Daniel M Covitz JNellie Liang Gustavo A Suarez cp memo 09/16/2008 09:58 AM AIG.cp.091608.dmc.gs.doc

Nellie, Nice memo. We put in some edits and updated facts. Changes are tracked, so please accept or reject them before sending. Dan and Gustavo

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(b) (4) and (b) (5)

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(b) (4) and (b) (5)

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From: To: Cc: Subject: Date:

Mike Collins Jon D Greenlee; Deborah P Bailey; Roger Cole Susan V Foley Fw: Summary of actions for Lehman Brothers FSB and AIG FSB 09/16/2008 10:07 AM

FYI Michael E. Collins Senior Vice President and Lending Officer Federal Reserve Bank of Philadelphia 215-574-4142 215-574-3943 (fax)
Gail Todd/PHIL/FRS To 09/16/2008 09:29 AM cc Subject Summary of actions for Lehman Brothers FSB and AIG FSB Mike Collins/PHIL/FRS@FRS, Vish Viswanathan/PHIL/FRS@FRS

----- Forwarded by Mike Collins/PHIL/FRS on 09/16/2008 10:05 AM -----

Restricted - FR Lehman Brothers FSB
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Not Responsive

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AIG FSB Brief Profile: As of 6/30/08: Total Assets $1.2 bil Total Deposits $1.1 bil
(b) (8)

Discount Window documents - however, no collateral DLOD Cap Deminimus Capacity $57 mil Avg Peak DLOD $ 3 thousand Peak DLOD $28 thousand Account Activity: A
(b) (4) (b)(4), (b)(5), & (b)(8)

Not Responsive

Please let me know if you need any additional information. Gail

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From: To: Cc: Subject: Date:

Tim P Clark Deborah P Bailey Jon D Greenlee Re: AIG -monolines/guarantors 09/16/2008 10:22 AM

AIG has sold a lot of protection that is similar to the type of protection the guarantors sold -- 'super senior' protection against CDOs. They sold $80 billion of 'multi-sector' CDO protection, which includes the ABS CDO type stuff the guarantors did and had taken MTM losses of $27 billion against that as of August. As of August, they had posted $16 billion of collateral against these MTM losses, leaving $10 billion open exposure at counterparties. They also have a large book of corporate CDO related CDS protection sold and given what spreads aredoing this is no doubt causing some MTM losses -- and growing exposures at banks -- as well. ▼ Deborah P Bailey/BOARD/FRS
Deborah P Bailey/BOARD/FRS

To cc Subject

Tim P Clark/BOARD/FRS@BOARD Jon D Greenlee/BOARD/FRS AIG -monolines/guarantors

09/16/2008 10:09 AM

Tim, was AIG big in this? I can't remember. If you have any insights please provide to Jon. I have asked him to be the point on this. thanks

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From: To: Subject: Date: Attachments:

Kieran Fallon Scott Alvarez; neel.kashkari@do.treas.gov Outline of Emergency Resolution and Funding Authority 09/16/2008 10:36 AM Nonbank Financial Firm Resolutions (Sept. 16, 2008 v2).doc

Kieran J. Fallon Assistant General Counsel Board of Governors of the Federal Reserve System 20th Street & Constitution Ave., N.W. Washington, D.C. 20551 Tel: 202-452-5270 Fax: 202-452-3101

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From: To:

Cc: Subject: Date:

William Johnson Christopher Hunter; Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin Lang; Brandon Hall; Brian Begalle; Brian Hefferle; Brian Peters; Bridget Habib; Caroline Nuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; Deborah Lohnau; Dexter Williams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; Jan Voigts; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Harvey; John Heinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; Joshua Sherwin; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kevin Clarke; Kevin Coffey; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Lawrence ROSTOKER; Laxmi Rao; Lucinda M Brickler; Luis Uranga; Mark Scapp; Michael Johnson; Nancy R Berlad; Patrick M Parkinson; Paul Whynott; Randolph Brown; Richard Kunen; Richard McGee; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sarah Dahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Theodore Lubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Todd Waszkelewicz; Che Sidanius; Jeremy Gagne; Emily Bradley CLS 9/16 update - morning 09/16/2008 10:54 AM

CLS Update - Tuesday 9/16/08 morning
Not Responsive

(b)(4) & (b)(8)

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William Johnson Federal Reserve Bank of New York 212-720-2393

BOG-- FOIA 10-251 --000925

From: To: Cc: Subject: Date:

Fang Du BSR Credit Risk@BOARD Jon D Greenlee Banks linked to $75 billion lending facility after AIG rating downgrade 09/16/2008 11:04 AM

AIG had its key credit rating downgraded by all three major rating agencies after receiving a $20 billion lifeline from New York insurance regulators. The insurer is also working to secure a lending facility arranged by JPMorgan Chase and Goldman Sachs of as much as $75 billion, a crucial step in light of the downgrade, which has the potential to trigger substantial collateral payments on AIG's numerous creditderivative trades. Standard & Poor's warned that AIG's credit rating could be reduced even more if it is not able to "implement further liquidity options" and "the successful sale of at least a portion of its business assets." Best Regards, Fang Du BS&R, Federal Reserve Board (202) 872 - 4971 or (401) 789 -1194 fang.du@frb.gov

(b) (6)

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From: To: Cc: Subject: Date:

Betsy Gordon NY Bank Sup - LFI CPC Updates@FRS paul.austin@ny.frb.org; Christopher Hunter payments-settlement ..update 09/16/2008 11:15 AM

Not Responsive

(b)(4) & (b)(8)

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Not Responsive

Regards, Betsy H. Gordon Federal Reserve Bank of New York: 1 (212) 720-2257 UBS 203 719-7389 Blackberry (b) (6)

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From: To: Cc: Subject: Date: Attachments:

Daniel M Covitz JNellie Liang Gustavo A Suarez cp memo 09/16/2008 11:21 AM AIG.cp.091608.dmc.gs.doc

Nellie, (b) (5)

Dan and Gustavo

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(b) (4) and (b) (5)

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(b) (4) and (b) (5)

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From: To:

Cc: Subject: Date: Attachments:

Renuka Vijayanathan Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin Lang; Brandon Hall; Brian Begalle; Brian Hefferle; Brian Peters; Bridget Habib; Caroline Nuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; Deborah Lohnau; Dexter Williams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; Jan Voigts; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Harvey; John Heinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; Joshua Sherwin; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kevin Clarke; Kevin Coffey; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Lawrence ROSTOKER; Laxmi Rao; Lucinda M Brickler; Luis Uranga; Mark Scapp; Michael Johnson; Nancy R Berlad; Patrick M Parkinson; Paul Whynott; Randolph Brown; Richard Kunen; Richard McGee; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sarah Dahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Theodore Lubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Randolph Brown; Kenton Beerman; Glen Reppy; Bin Lang; Catherine A Tilford SG- 9/16 liquidity update 10.30am 09/16/2008 11:25 AM

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(b)(4) & (b)(8)

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From: To: Cc: Subject: Date:

John Ammer Mark Carey Sally M Davies Re: Fw: International ramifications of an AIG failure - poking a bit more at the 10-K 09/16/2008 11:27 AM

Mark: I have the reporting-segment balance sheet information (Note 2) and information about AIG investments (Note 3) on my desk if you want to have a look. There are $145 billion inl eliminations, but it is not clear if they are mainly parentsub or sub-sub. AIGFP had $115 billion in end-'07 assets and was involved to at least some extent in offering CDS protection on CDO tranches. About 28% of the group's half-trillion dollar bond porttfolio was in the MBS/ABS category, with Fair Value stated as just a few percent below Cost. -John ▼ Mark Carey/BOARD/FRS
Mark Carey/BOARD/FRS

To cc Subject

Sally M Davies/BOARD/FRS@BOARD, John Ammer/BOARD/FRS@BOARD Fw: International ramifications of an AIG failure

09/15/2008 05:53 PM

I wrote the email below in response to a question raised at a meeting earlier today. Mark Carey Adviser Division of International Finance Federal Reserve Board Washington, DC 20551 USA (202) 452-2784 voice (202) 872-4926 fax mark.carey@frb.gov email
Mark Carey/BOARD/FRS

----- Forwarded by Mark Carey/BOARD/FRS on 09/15/2008 05:52 PM -----

To cc Subject

IF Officers and Section Chiefs International ramifications of an AIG failure

09/15/2008 05:29 PM

Duplicate
BOG-- FOIA 10-251 --000938

From: To: Subject: Date:

Coryann Stefansson Deborah P Bailey; BSR LIG; Roger Cole; Norah Barger; William English; Brian Peters Fw: Citi - AIG 09/16/2008 11:32 AM

(b) (5) Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # (b) (6) ▼ Brian Peters ----- Original Message ----From: Brian Peters Sent: 09/16/2008 11:19 AM EDT To: Coryann Stefansson; Terrence Checki Subject: Fw: Citi - AIG

(b) (4) (b) (5) and (b) (8) ▼ William Hallacy ----- Original Message ----From: William Hallacy Sent: 09/16/2008 11:16 AM EDT To: Brian Peters; Dianne Dobbeck; Catherine Voigts; Steven Mirsky; Alejandro LaTorre; NY Banksup AIG Monitoring and Analysis Cc: Antonio Alvarez; Steven Mirsky; Dexter Williams; Bridget Habib; Jordan Pollinger; Kyle Grieser; Brandon Hall; Laxmi Rao Subject: Citi - AIG

Just got off phone w/Citi (b) (4) and (b) (8)

William Hallacy, CFA Federal Reserve Bank of New York Fed 212-720-2776 Citi 212-583-7104

BOG-- FOIA 10-251 --000939

From: To: Subject: Date: Attachments:

Rich Ashton Scott.Alvarez@frb.gov; Mark VanDerWeide; Sophia H Allison Draft memo on authority to make advance attached 09/16/2008 11:34 AM AIG authority to make advance memo.doc

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(b) (5)

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2 (b) (5)

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3 (b) (5)

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From: To: Subject: Date:

Deborah P Bailey Jon D Greenlee; Brian F Madigan; Roger.Cole@frb.gov; William R Nelson; William B English; Donald L Kohn Fw: Citi - AIG 09/16/2008 11:34 AM

(b)(4) & (b)(8)
----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/16/2008 11:33 AM ----Coryann Stefansson/BOARD/FRS

To

09/16/2008 11:32 AM cc Subject

Deborah P Bailey/BOARD/FRS@BOARD, BSR LIG, "Roger Cole" <Roger.Cole@frb.gov>, "Norah Barger" <Norah.Barger@frb.gov>, "William English" <William.B.English@frb.gov>, "Brian Peters" <Brian.Peters@ny.frb.org> Fw: Citi - AIG

Duplicate

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From: To:

Cc: Subject: Date:

William Johnson Christopher Hunter; Brian Begalle; Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin Lang; Brandon Hall; Brian Begalle; Brian Hefferle; Brian Peters; Bridget Habib; Caroline Nuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; Deborah Lohnau; Dexter Williams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; Jan Voigts; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Harvey; John Heinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; Joshua Sherwin; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kevin Clarke; Kevin Coffey; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Lawrence ROSTOKER; Laxmi Rao; Lucinda M Brickler; Luis Uranga; Mark Scapp; Michael Johnson; Nancy R Berlad; Patrick M Parkinson; Paul Whynott; Randolph Brown; Richard Kunen; Richard McGee; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sarah Dahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Theodore Lubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon; Jeanmarie Davis Todd Waszkelewicz; Che Sidanius; Jeremy Gagne; Emily Bradley CLS update 9/16 11am 09/16/2008 11:37 AM

Not Responsive

(b)(4), (b)(5), & (b)(8)

William Johnson Federal Reserve Bank of New York 212-720-2393

BOG-- FOIA 10-251 --000945

From: To: Subject: Date:

Coryann Stefansson Deborah P Bailey; Jennifer Burns Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte) 09/16/2008 11:39 AM

Now we know why there is concern Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # (b) (6) ▼ Nancy R Berlad ----- Original Message ----From: Nancy R Berlad Sent: 09/16/2008 10:57 AM EDT To: BSR LIG Subject: Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte)

Cory,

Key Points from E-mail below:
Not Responsive

(b)(4), (b)(5), & (b)(8)
----- Forwarded by Nancy R Berlad/BOARD/FRS on 09/16/2008 10:51 AM ----Brad Evans/RICH/FRS@FRS

To cc

NY Banksup LFI CPC Jennifer Burns/RICH/FRS@FRS, Lisa A White, Nancy R Berlad/BOARD/FRS@BOARD Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte)

09/16/2008 08:52 AM

Subject

Duplicate

BOG-- FOIA 10-251 --000946

From: To: Cc: Subject: Date:

Timothy Carlin NY Bank Sup - LFI CPC Updates@FRS Stephanie Chaly; Linda Rodriguez; Yogesh Shah; Nirali Deringer; Carol Roller; Pat Soriano; Christopher Hunter; Richard Kunen Barclays Ops Update 09/16/2008 11:41 AM

RESTRICTED FR Barclays Ops Update
(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000947

From: To: Cc: Subject: Date: Attachments:

Bart Simon Elise Liebers; Diane Fraser Cynthia L Martin CS AIG commentary 09/16/2008 11:41 AM CSFB - AIG Commentary - 9-16-2008.pdf

_________________________ Bart Simon Federal Reserve Bank of Boston 600 Atlantic Avenue Boston, Massachusetts 02210 (617) 973-3231 Mailing address: Post Office Box 55882 Boston, Massachusetts 02205

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(b) (4)

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(b) (4)

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From: To: Subject: Date:

Michelle A Smith Calvin Mitchell; Thomas Baxter; Scott Alvarez Re: draft statement 09/16/2008 11:42 AM

(b) (5)

From: Calvin.Mitchell Sent: 09/16/2008 11:41 AM AST To: Michelle Smith; Thomas Baxter; Scott Alvarez Subject: draft statement
(b) (5)

BOG-- FOIA 10-251 --000955

From: To: Cc: Subject: Date: Attachments:

Sophia H Allison Rich Ashton Mark VanDerWeide; Scott Alvarez; Kieran Fallon; sophia.h.allison@frb.gov; stephanie.martin@frb.gov Re: Draft memo on authority to make advance attached 09/16/2008 11:46 AM AIG authority to make advance memo sha 09162008.doc

Rich, Some minor edits - I have somewhere the authorities for the last edit on the last page where it says [CITES]. Sophia Attachment: U:\Allison\A\2008\AIG\AIG authority to make advance memo_sha_09162008.doc

▼ Rich Ashton/BOARD/FRS
Rich Ashton/BOARD/FRS

To

09/16/2008 11:34 AM

Scott.Alvarez@frb.gov, Mark VanDerWeide/BOARD/FRS@BOARD, Sophia H Allison/BOARD/FRS@BOARD Draft memo on authority to make advance attached

cc Subject

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(b) (5)

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(b) (5)

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(b) (5)

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From: To: Cc: Subject: Date:

Tim P Clark Coryann Stefansson Brian Peters; BSR LIG; Deborah P Bailey; Norah Barger; Roger Cole; William English Re: Fw: Citi - AIG 09/16/2008 11:47 AM

(b)(4), (b)(5), & (b)(8)

▼ Coryann Stefansson/BOARD/FRS
Coryann Stefansson/BOARD/FRS

To

09/16/2008 11:32 AM cc Subject

Deborah P Bailey/BOARD/FRS@BOARD, BSR LIG, "Roger Cole" <Roger.Cole@frb.gov>, "Norah Barger" <Norah.Barger@frb.gov>, "William English" <William.B.English@frb.gov>, "Brian Peters" <Brian.Peters@ny.frb.org> Fw: Citi - AIG

Duplicate

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From: To:

Cc: Subject: Date:

Moses Cheng Alexa Philo; Amy White; Anthony Cirillo; Arthur Angulo; Barbara Gorzkowski; Barbara Yelcich; Bard Stermasi; Brandon Hall; Brian Peters; Bridget Habib; Caren Cox; Caroline Frawley; Catherine A Tilford; Catherine Voigts; Chris Haley; Chris McCurdy; Christopher Calabia; Claudia Franco; Corbin Long; Coryann Stefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Denise Goodstein; Dennis Ryan; Dexter Williams; Diane Rose; Dianne Dobbeck; Genevievette.E.Walker@frb.gov; Gretchen Cappiello; H Clay Saylor; Helen Mucciolo; Homer Hill; Jack Jennings; James Hodgetts; James Wall; Jan Voigts; Jane Majeski; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Heinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Jyoti Kohli; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kevin Clarke; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Larry Bonnemere; Laura A Macedo; Laxmi Rao; Lily Tham; Linda Rodriguez; Lisa A White; Lisa Joniaux; Lucinda M Brickler; Lydia Tshulos; Marilyn Arbuthnott; Mark Scapp; Mayra Gonzalez; Michael Johnson; Myron L Kwast; Pamela S Powell; Pat Soriano; Patrick M Parkinson; Patrick Roche; Philip Aquilino; Ralph Santasiero; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; Stacy.L.Coleman@rich.frb.org; Stanley Poszywak; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Terry Muckleroy; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas J O'Keeffe; Tim.P.Clark@frb.gov; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Richard Kunen; Pat Soriano; John Harvey; Taitu Wondwosen; Paula Premo; Peter DeMontravel; Om Arya; Jane Wakefield; Jordan Pollinger DB September 16, 2008 Market Risk Management Morning Update 09/16/2008 11:49 AM

**Restricted FR** Prepared by Moses Cheng and Tai Wondwosen
(b)(4) & (b)(8)

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************************************* Moses Cheng, CFA, FRM Federal Reserve Bank of New York 212-720-1433 212-250-6075

BOG-- FOIA 10-251 --000962

From: To: Cc: Subject: Date: Attachments:

Rich Ashton Scott.Alvarez@frb.gov Mark VanDerWeide; Sophia H Allison Latest resolution 09/16/2008 11:51 AM AIG resolution II.doc

BOG-- FOIA 10-251 --000963

(b) (5)

BOG-- FOIA 10-251 --000964

From: To: Subject: Date: Attachments:

Scott Alvarez Timothy Geithner; Thomas Baxter Fw: Latest resolution 09/16/2008 11:56 AM AIG resolution II.doc

Here is to present to the Board after FOMC. (b) (5) Tim, are you available to update the Board before they vote? We can warn you when the end of FOMC draws near. Thanks and comments welcome. Scott -------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Rich.Ashton Sent: 09/16/2008 11:51 AM AST To: Scott Alvarez Cc: Mark VanDerWeide; Sophia Allison Subject: Latest resolution

(See attached file: AIG resolution II.doc)

- AIG resolution II.doc

BOG-- FOIA 10-251 --000965

(b) (5)

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From: To: Subject: Date: Importance:

Scott Alvarez Thomas Baxter AIG 09/16/2008 11:59 AM High

Tom (b) (5) Scott -------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000967

From: To: Cc: Subject: Date:

Calvin Mitchell Michelle A Smith Scott Alvarez; Thomas Baxter Re: draft statement 09/16/2008 12:01 PM

Sorry for the confusion; it's a fast moving target.

(b) (5)

▼ Michelle A Smith/BOARD/FRS@BOARD
Michelle A Smith/BOARD/FRS@BOARD

To

09/16/2008 11:45 AM

Calvin Mitchell/NY/FRS@FRS, Thomas Baxter/NY/FRS@FRS, Scott Alvarez/BOARD/FRS@BOARD

cc Subject Re: draft statement

Duplicate

BOG-- FOIA 10-251 --000968

From: To: Cc: Subject: Date: Attachments:

JNellie Liang Donald L Kohn; Kevin Warsh; Randall S Kroszner; Elizabeth A Duke; Rita C Proctor Brian F Madigan; Patrick M Parkinson; JNellie Liang Update on conditions in the commercial paper market 09/16/2008 12:03 PM AIG.CP.091608.pdf

Attached is a brief memo on conditions in the commercial paper market yesterday.

BOG-- FOIA 10-251 --000969

(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000971

From: To: Cc: Subject: Date: Attachments:

JNellie Liang Stephen D Oliner; Michael G Palumbo; Karen Dynan; William B English; James A Clouse Daniel M Covitz; Gustavo A Suarez update on commercial paper market 09/16/2008 12:06 PM AIG.CP.091608.pdf

Brief memo sent to Board on conditions in the commercial paper market yesterday.

BOG-- FOIA 10-251 --000972

(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000974

From: To: Subject: Date:

Brian Peters Coryann Stefansson; Deborah P Bailey; BSR LIG; Roger Cole; Norah Barger; William B English Re: Citi - AIG 09/16/2008 12:11 PM

Working to confirm at citi and elsewhere

----- Original Message ----From: Coryann.Stefansson Sent: 09/16/2008 11:32 AM AST To: Deborah Bailey; BSR.LIG@frbog.frb.gov; Roger Cole; Norah Barger; William English; Brian Peters Subject: Fw: Citi - AIG

Duplicate

BOG-- FOIA 10-251 --000975

From: To: Cc: Subject: Date: Importance: Attachments:

Jeff Stehm Lisa Joniaux; William Carlucci; Lawrence Sweet; Marsha Takagi Theodore Lubke; Jeffrey Marquardt; Coryann Stefansson; Genevievette E Walker Known AIG US Infrastructure participation 09/16/2008 12:18 PM High Known AIG affiliates - Infrastructure Participation.xls

All, Here is what we could find on AIG affiliates participation in DTCC, OCC, CME, et al so far. This information has been confirmed by a check of the membership lists of these infrastructures, but we are not sure if other AIG affiliates going by a name that is not know to us are also participants. If anyone has additional information to provide please let us know and we'll update this chart.

Jeff Stehm Associate Director Federal Reserve Board 202-452-2217 (office) (b) (6) email: jeff.stehm@frb.gov

BOG-- FOIA 10-251 --000976

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000977

From: To: Subject: Date:

Scott Alvarez Neel Kashkari Re: fund insert 09/16/2008 12:20 PM

Neel How are we doing? Any news on AIG? Scott -------------------------Sent from my BlackBerry Wireless Handheld

From: Neel.Kashkari Sent: 09/16/2008 10:17 AM AST To: Scott Alvarez Subject: Re: fund insert Not yet. Will be back soon.

From: Scott.Alvarez@frb.gov To: Kashkari, Neel Sent: Tue Sep 16 10:11:13 2008 Subject: Re: fund insert

Any progress? We'll break in about 30 minutes. Anything I should pass on to the Chair at that point? I'll have a revised outline on legislation before then. We are already at work on a draft of the bill language. Thanks!! Scott -------------------------Sent from my BlackBerry Wireless Handheld

From: Neel.Kashkari Sent: 09/16/2008 08:53 AM AST To: Scott Alvarez
BOG-- FOIA 10-251 --000978

Subject: Re: fund insert You got it

----- Original Message ----From: Scott.Alvarez@frb.gov <Scott.Alvarez@frb.gov> To: Kashkari, Neel Sent: Tue Sep 16 08:53:08 2008 Subject: Re: fund insert Neel (b) (5) Thanks Scott -------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message ----From: Neel.Kashkari Sent: 09/16/2008 12:40 AM AST To: Scott Alvarez Cc: Terrence Checki Subject: Re: fund insert

Sounds good ----- Original Message ----From: Scott.Alvarez@frb.gov <Scott.Alvarez@frb.gov> To: Kashkari, Neel Cc: Terrence.Checki@ny.frb.org <Terrence.Checki@ny.frb.org> Sent: Tue Sep 16 00:39:19 2008 Subject: Re: fund insert Neel, (b) (5)

Scott

BOG-- FOIA 10-251 --000979

Neel.Kashkari@do. treas.gov To 09/16/2008 12:34 scott.alvarez@frb.gov, AM Terrence.Checki@ny.frb.org cc Subject Re: fund insert

(b) (5)

----- Original Message ----From: Scott.Alvarez@frb.gov <Scott.Alvarez@frb.gov> To: Kashkari, Neel; Terrence.Checki@ny.frb.org <Terrence.Checki@ny.frb.org> Sent: Tue Sep 16 00:29:09 2008 Subject: fund insert

Here's a draft insert for the fund. Need more detail? Thanks! Scott

BOG-- FOIA 10-251 --000980

From: To: Subject: Date:

Neel.Kashkari@do.treas.gov Scott.Alvarez@frb.gov RE: fund insert 09/16/2008 12:23 PM

(b) (5)

From: Scott.Alvarez@frb.gov [mailto:Scott.Alvarez@frb.gov] Sent: Tuesday, September 16, 2008 12:20 PM To: Kashkari, Neel Subject: Re: fund insert

Neel How are we doing? Any news on AIG? Scott -------------------------Sent from my BlackBerry Wireless Handheld

Duplicate

BOG-- FOIA 10-251 --000981

From: To: Subject: Date: Attachments:

Melissa A Vanlandingham William Carlucci AIG clearing broker/dealer, settling bank, outstanding CP 09/16/2008 12:25 PM Selected Affiliated Members of Payments and Settlement Systems September 2008.xlsm

Hi Bill, In case you're tired of Lehman...let's talk AIG. I am re-attaching the spreadsheet with the participant family group groups and the systems they use just so it is clear what I am asking about. There is no new info on it since I sent it to you the other day.

(b)(4), (b)(5), & (b)(8)

Also, can you pull infomation on the outstanding CP in AIG's various programs? Thanks. Melissa Vanlandingham Financial Services Analyst Board of Governors of the Federal Reserve System Division of Reserve Bank Operations and Payment Systems 202-530-6285

BOG-- FOIA 10-251 --000982

BOG-- FOIA 10-251 --000983

From: To: Subject: Date:

Scott Alvarez Neel Kashkari Re: fund insert 09/16/2008 12:26 PM

Great. (b) (5) Thanks Scott -------------------------Sent from my BlackBerry Wireless Handheld

From: Neel.Kashkari Sent: 09/16/2008 12:23 PM AST To: Scott Alvarez Subject: RE: fund insert
Duplicate

BOG-- FOIA 10-251 --000984

From: To: Cc: Subject: Date:

Jeffrey Levine NY Bank Sup - LFI CPC Updates Theonilla Lee-Chan; Barbara Yelcich; Gregory Gaare; Laura Braverman; Jennifer Tranter; Erin Upton; Edgar Moreano; Christopher Hunter; Antonino Piscitello; James DeFalco; Liska Holness; Benjamin Eddy JPMC: Liquidity Update from 10:30am conversation with Treasury 09/16/2008 12:29 PM

**Strictly Confidential - F.R. Material** All, Below are some highlights from this morning's call with JPMC's Treasury. Jeff
Not Responsive

BOG-- FOIA 10-251 --000985

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BOG-- FOIA 10-251 --000986

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(b)(4) & (b)(8)

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BOG-- FOIA 10-251 --000987

From: To: Subject: Date:

Oesterle, Mark (Banking) Laricke.D.Blanchard@frb.gov Re: 09/16/2008 12:31 PM

Yep and aig in particular. -------------------------Sent from my BlackBerry Wireless Handheld

From: Laricke.D.Blanchard@frb.gov To: Oesterle, Mark (Banking) Sent: Tue Sep 16 12:28:25 2008 Subject: Re:

Ok. Status update re recent market developments? -------------------------Sent from my BlackBerry Wireless Handheld

From: "Oesterle, Mark (Banking)" [Mark_Oesterle@banking.senate.gov] Sent: 09/16/2008 12:22 PM AST To: Laricke Blanchard Subject: Re: Sorry was with him and could go to bb. He was looking for a status update -------------------------Sent from my BlackBerry Wireless Handheld ----- Original Message ----From: Laricke.D.Blanchard@frb.gov <Laricke.D.Blanchard@frb.gov> To: Oesterle, Mark (Banking) Sent: Tue Sep 16 11:54:02 2008 I hear that Shelby is trying to reach the Chairman. We are in FOMC. Do you know what the topic is? -------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000988

From: To: Subject: Date:

Neel.Kashkari@do.treas.gov scott.alvarez@frb.gov Re: fund insert 09/16/2008 12:41 PM

Yes.

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000989

From: To:

Subject: Date: Attachments:

Diya K Chauhan Adrienne Haden; Barbara Cornyn; Craig F Marchbanks; David K Lynch; Diane Fraser; Donald N Gabbai; James Embersit; John T Colwell; Jon D Greenlee; Karen L El Kochta; Mary L Arnett; Nina Nichols; Robert F Cote; Sabeth I Siddique; Brian P Valenti; Lawrence A Rufrano Analyst Reports-Lehman, AIG, BOA 09/16/2008 12:49 PM WF Lehman exposure.pdf AIG analysis-15Sep.pdf AIG Comment by Morgan Stanely Research.pdf AIG Industry Comment 16Sep.pdf BOA Analysis-16Sep.pdf BOA Analysis.pdf Lehman CDOs-Fitch.pdf

Diya K. Chauhan Division of Banking Supervision and Regulation Board of Governors of the Federal Reserve System (202) 452-3046

BOG-- FOIA 10-251 --000990

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BOG-- FOIA 10-251 --000991

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BOG-- FOIA 10-251 --000992

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BOG-- FOIA 10-251 --000993

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BOG-- FOIA 10-251 --000994

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BOG-- FOIA 10-251 --000997

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BOG-- FOIA 10-251 --000998

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BOG-- FOIA 10-251 --000999

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BOG-- FOIA 10-251 --001000

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BOG-- FOIA 10-251 --001001

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BOG-- FOIA 10-251 --001002

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BOG-- FOIA 10-251 --001003

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BOG-- FOIA 10-251 --001004

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BOG-- FOIA 10-251 --001005

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BOG-- FOIA 10-251 --001006

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BOG-- FOIA 10-251 --001007

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BOG-- FOIA 10-251 --001008

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BOG-- FOIA 10-251 --001009

(b) (4)

BOG-- FOIA 10-251 --001010

(b) (4)

BOG-- FOIA 10-251 --001011

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BOG-- FOIA 10-251 --001012

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BOG-- FOIA 10-251 --001013

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BOG-- FOIA 10-251 --001014

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BOG-- FOIA 10-251 --001015

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BOG-- FOIA 10-251 --001016

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BOG-- FOIA 10-251 --001017

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BOG-- FOIA 10-251 --001018

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BOG-- FOIA 10-251 --001019

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BOG-- FOIA 10-251 --001020

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BOG-- FOIA 10-251 --001024

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BOG-- FOIA 10-251 --001026

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BOG-- FOIA 10-251 --001027

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BOG-- FOIA 10-251 --001028

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BOG-- FOIA 10-251 --001029

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BOG-- FOIA 10-251 --001030

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BOG-- FOIA 10-251 --001042

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BOG-- FOIA 10-251 --001043

From: To:

Subject: Date: Attachments:

Diya K Chauhan Adrienne Haden; Barbara Cornyn; Craig F Marchbanks; David K Lynch; Diane Fraser; Donald N Gabbai; James Embersit; John T Colwell; Jon D Greenlee; Karen L El Kochta; Mary L Arnett; Nina Nichols; Robert F Cote; Sabeth I Siddique; Brian P Valenti; Lawrence A Rufrano Ratings Downgrades Reports 09/16/2008 12:51 PM Lehman downgrade by S&P.pdf Merrill Entities on Watch-Fitch.pdf WAMU Downgrade by S&P.pdf AIG downgrade by Moody's.pdf BOA downgrade by Moody's.pdf BOA Downgrade by S&P.pdf Lehman downgrade by Fitch.pdf Lehman downgrade by Moody's.pdf

Diya K. Chauhan Division of Banking Supervision and Regulation Board of Governors of the Federal Reserve System (202) 452-3046

BOG-- FOIA 10-251 --001044

Fitch Press Release

Page 1 of 2

Not Responsive

BOG-- FOIA 10-251 --001045

http://www.fitchresearch.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=434960

9/16/2008

Fitch Press Release

Page 2 of 2

Not Responsive

BOG-- FOIA 10-251 --001046

http://www.fitchresearch.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=434960

9/16/2008

Moodys - Corporate Highlights
(b) (4)

Page 1 of 6

BOG-- FOIA 10-251 --001047

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi... 9/16/2008

Moodys - Corporate Highlights

Page 2 of 6

(b) (4)

BOG-- FOIA 10-251 --001048

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi... 9/16/2008

Moodys - Corporate Highlights

Page 3 of 6

(b) (4)

BOG-- FOIA 10-251 --001049

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi... 9/16/2008

Moodys - Corporate Highlights
(b) (4)

Page 4 of 6

BOG-- FOIA 10-251 --001050

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi... 9/16/2008

Moodys - Corporate Highlights

Page 5 of 6

(b) (4)

BOG-- FOIA 10-251 --001051

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi... 9/16/2008

Moodys - Corporate Highlights

Page 6 of 6

(b) (4)

Back to To

©Copyright 2008 Moody's Investors Service 16 SEP 2008, 12:20 Eastern Time

Terms of Use

Privacy Policy

Proprietary Rights

BOG-- FOIA 10-251 --001052

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi... 9/16/2008

Moodys - Corporate Highlights

Page 1 of 3

Not Responsive

BOG-- FOIA 10-251 --001053

Moodys - Corporate Highlights

Page 2 of 3

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BOG-- FOIA 10-251 --001054

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006804&origi... 9/16/2008

Moodys - Corporate Highlights

Page 3 of 3

Not Responsive

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©Copyright 2008 Moody's Investors Service 16 SEP 2008, 12:24 Eastern Time

Terms of Use

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Proprietary Rights

BOG-- FOIA 10-251 --001055

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006804&origi... 9/16/2008

Fitch Press Release

Page 1 of 2

Not Responsive

BOG-- FOIA 10-251 --001056

http://www.fitchresearch.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=435010

9/16/2008

Fitch Press Release
Not Responsive

Page 2 of 2

BOG-- FOIA 10-251 --001057

http://www.fitchresearch.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=435010

9/16/2008

Moodys - Corporate Highlights

Page 1 of 3

Not Responsive

BOG-- FOIA 10-251 --001058

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006796&origi... 9/16/2008

Moodys - Corporate Highlights

Page 2 of 3

Not Responsive

BOG-- FOIA 10-251 --001059

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006796&origi... 9/16/2008

Moodys - Corporate Highlights
Not Responsive

Page 3 of 3

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©Copyright 2008 Moody's Investors Service 16 SEP 2008, 12:23 Eastern Time

Terms of Use

Privacy Policy

Proprietary Rights

BOG-- FOIA 10-251 --001060

http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006796&origi... 9/16/2008

From: To: Subject: Date: Attachments:

William R Nelson Krista Box Re: Two reports on AIG from S&P "Ratings Direct" 09/16/2008 12:52 PM S&P AIG Ratings.pdf S&P re- AIG Downgrade.pdf

thanks! Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 (b) (6) Mobile: ▼ Krista Box/BOARD/FRS
Krista Box/BOARD/FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD Two reports on AIG from S&P "Ratings Direct"

09/16/2008 12:20 PM

Bill, I finally managed to find someone who has access to Standard and Poor's "Ratings Direct" database. Here are two reports on AIG. One is dated September 15, and the other September 16.

Please let me know if these aren't what you were expecting and if you'd like me to continue searching. - Krista Box, Research Library, x3332

BOG-- FOIA 10-251 --001061

From: To: Cc: Subject: Date:

Diane.Fraser@frb.gov Elise.Liebers@ny.frb.org; Diane.Fraser@frb.gov Cynthia.L.Martin@bos.frb.org; Bart.Simon@bos.frb.org; Cynthia.L.Bordelon@chi.frb.org Wall St. jumps on report government mulls AIG cash 09/16/2008 12:54 PM

Business Insurance
Wall St. jumps on report government mulls AIG cash Sept. 16, 2008 NEW YORK (Reuters)—U.S. stocks rose on Tuesday after CNBC television reported that government money had now been put on the table in discussions over a financial lifeline for embattled insurer American International Group Inc. The Dow Jones industrial average rose 27.93 points, or 0.26%, to 10,945.44. The Standard & Poor's 500 Index gained 2.58 points, or 0.22%, to 1,195.28. The NASDAQ Composite Index rose 5.21 points, or 0.24%, to 2,185.12. Stocks had slid earlier as investors feared that without a financial lifeline, AIG's survival might come into question as the credit squeeze weighs on the company. Shares of AIG, a Dow component, pared losses to trade off 18% at $3.90. Earlier the stock had plunged by more than 40% amid uncertainty about a potential rescue deal. Worries about AIG were accentuated by concerns that the U.S. government would refuse to provide a financial lifeline as it did in the case of Lehman Brothers Holdings. The 158-year-old Wall Street icon subsequently filed for bankruptcy protection on Monday. Copyright 2008 Reuters Limited. Click for restrictions.

BOG-- FOIA 10-251 --001062

From: To: Subject: Date:

Ann Miner Jennifer A Lucier Fw: Counterparty Update 9/16/08 - Midday 09/16/2008 01:01 PM

----- Forwarded by Ann Miner/NY/FRS on 09/16/2008 01:00 PM ----William Hallacy/NY/FRS

To cc Subject

NY BankSup New York CPC Fw: Counterparty Update 9/16/08 - Midday

09/16/2008 12:42 PM

Restricted FR
(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --001063

Not Responsive

William Hallacy, CFA Federal Reserve Bank of New York Fed 212-720-2776 Citi 212-583-7104

BOG-- FOIA 10-251 --001064

From: To: Subject: Date:

William R Nelson Krista Box Re: Two reports on AIG from S&P "Ratings Direct" 09/16/2008 01:02 PM

thanks Krista. Both of those are discussions of downgrades that ocurred because of the AIG downgrade. What would be most helpful would be a discussion of why the parent company, AIG, was downgraded. It's not crucial if it is turning out to be a lot of work. The information is pretty much covered by the wire services. --Bill Email: william.r.nelson@frb.gov Office: 202-452-3579 Blackberry: 202-725-3612 (b) (6) Mobile: ▼ Krista Box/BOARD/FRS
Krista Box/BOARD/FRS

To cc Subject

William R Nelson/BOARD/FRS@BOARD Two reports on AIG from S&P "Ratings Direct"

09/16/2008 12:20 PM

Duplicate

BOG-- FOIA 10-251 --001065

From: To:

Subject: Date: Attachments:

Diya K Chauhan Adrienne Haden; Barbara Cornyn; Craig F Marchbanks; David K Lynch; Diane Fraser; Donald N Gabbai; James Embersit; John T Colwell; Jon D Greenlee; Karen L El Kochta; Mary L Arnett; Nina Nichols; Robert F Cote; Sabeth I Siddique; Brian P Valenti; Lawrence A Rufrano AIG downgrade by S&P 09/16/2008 01:02 PM AIG downgrade by S&P.pdf

one more- sorry

Diya K. Chauhan Division of Banking Supervision and Regulation Board of Governors of the Federal Reserve System (202) 452-3046

BOG-- FOIA 10-251 --001066

From: To:

Cc:

Subject: Date:

Edgar Moreano Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin Lang; Brandon Hall; Brian Begalle; Brian Hefferle; Brian Peters; Bridget Habib; Caroline Nuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; Deborah Lohnau; Dexter Williams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; Jan Voigts; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Harvey; John Heinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; Joshua Sherwin; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kevin Clarke; Kevin Coffey; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Lawrence ROSTOKER; Laxmi Rao; Lucinda M Brickler; Luis Uranga; Mark Scapp; Michael Johnson; Nancy R Berlad; Patrick M Parkinson; Paul Whynott; Randolph Brown; Richard Kunen; Richard McGee; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sarah Dahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Theodore Lubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon James DeFalco; Erin Upton; Gregory Gaare; Christopher Hunter; Jennifer Tranter; Antonino Piscitello; Jeffrey Levine; Laura Braverman; Theonilla Lee-Chan; Benjamin Eddy; Barbara Yelcich; Steven J Manzari; Gregory Gaare AIG drawing on its credit line 09/16/2008 01:05 PM

JPMC credit risk management confirmed that

(b)(4) & (b)(8)

Edgar Moreano Federal Reserve Bank of New York (212) 789-4359

BOG-- FOIA 10-251 --001067

From: To: Cc: Subject: Date: Attachments:

Carol Roller NY Bank Sup - LFI CPC Updates@FRS Stephanie Chaly; Yogesh Shah; Timothy Carlin; Linda Rodriguez; Nirali Deringer; Bridget Habib; Richard Kunen; Pat Soriano Barclays credit update - morning 9/16 09/16/2008 01:12 PM Credit Report 15Sep.snp

F.R. Restricted
(b)(4) & (b)(8)

Not Responsive

Collateral Management Credit Report - COB 9/15/08

The next Credit Risk Management meeting with Barclays is scheduled for 4:00 today.
Carol M. Roller Fed: (212) 720-1902 Barclays: (212) 412-4063

BOG-- FOIA 10-251 --001068

From: To: Subject: Date: Attachments:

Jeff Stehm Melissa A Vanlandingham; Dibora Amanuel; Jeffrey Marquardt; Susan V Foley Fw: AIG settling banks 09/16/2008 01:13 PM AIG settling banks info.pdf

Jeff Stehm Associate Director Federal Reserve Board 202-452-2217 (office)

(b) (6)jeff.stehm@frb.gov email:

----- Forwarded by Jeff Stehm/BOARD/FRS on 09/16/2008 01:13 PM ----Lisa Joniaux/NY/FRS@FRS

To cc Subject

Jeff Stehm/BOARD/FRS@BOARD Fw: AIG settling banks

09/16/2008 01:10 PM

Lisa Joniaux CPC for The Depository Trust Company Federal Reserve Bank of New York (212) 720-2530
Albert Alvarado/NY/FRS

----- Forwarded by Lisa Joniaux/NY/FRS on 09/16/2008 01:09 PM -----

To cc Subject

Benecia Cousin/NY/FRS@FRS, Ada Li/NY/FRS@FRS, Roger Graham/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS Lisa Joniaux/NY/FRS@FRS, William Carlucci/NY/FRS@FRS, Anna Ng/NY/FRS@FRS AIG settling banks

09/15/2008 08:01 PM

fyi -

BOG-- FOIA 10-251 --001069

(b)(4) & (b)(8)

BOG-- FOIA 10-251 --001070

From: To: Subject: Date: Attachments:

Joshua L Mazen Jeff Stehm Re: Fw: AIG FSB information 09/16/2008 01:20 PM AIG.xls AIG FSB 20080912.pdf

Jeff, This FSB entity is eligible for Fedwire funds and securities. So far today, the ABA is active in funds but not securities. --Josh Josh Mazen Board of Governors of the Federal Reserve System Division of Reserve Bank Operations and Payment Systems 202-452-2373 ▼ Jeff Stehm/BOARD/FRS
Jeff Stehm/BOARD/FRS

To cc Subject

Joshua L Mazen/BOARD/FRS@BOARD Fw: AIG FSB information

09/16/2008 01:10 PM

Josh, Please confirm for me the Fedwire funds and securities access for this FSB entity.....ABA below. Jeff Stehm Associate Director Federal Reserve Board 202-452-2217 (office) 202-412-9846 (cell) email: jeff.stehm@frb.gov
Danielle E Little/BOARD/FRS

----- Forwarded by Jeff Stehm/BOARD/FRS on 09/16/2008 01:10 PM -----

To

09/15/2008 01:32 PM

Jeffrey Marquardt/BOARD/FRS@BOARD, RBOPS PAYMENT SYSTEM RISK, Jeff Stehm/BOARD/FRS@BOARD AIG FSB information

cc Subject

BOG-- FOIA 10-251 --001071

Duplicate

BOG-- FOIA 10-251 --001072

From: To: Subject: Date:

Patrick M Parkinson brian.f.madigan@frb.gov; william.b.english@frb.gov; James A Clouse Fw: AIG drawing on its credit line 09/16/2008 01:22 PM

----- Forwarded by Patrick M Parkinson/BOARD/FRS on 09/16/2008 01:21 PM ----Edgar Moreano/NY/FRS@FRS

To

09/16/2008 01:05 PM

Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS, Andrew Small/NY/FRS@FRS, Anthony Cirillo/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, Barbara Yelcich/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS, Bin Lang/NY/FRS@FRS, Brandon Hall/NY/FRS@FRS, Brian Begalle/NY/FRS@FRS, Brian Hefferle/NY/FRS@FRS, Brian Peters/NY/FRS@FRS, Bridget Habib/NY/FRS@FRS, Caroline Nuffort/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, Christina Zausner/NY/FRS@FRS, Christine E Schwaninger/BOARD/FRS@BOARD, Christopher Calabia/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS, Clinton Lively/NY/FRS@FRS, Corbin Long/NY/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Craig Leiby/NY/FRS@FRS, Daniel Muccia/NY/FRS@FRS, Deborah Lohnau/NY/FRS@FRS, Dexter Williams/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS, Homer Hill/NY/FRS@FRS, Isabella Lo Piccolo/NY/FRS@FRS, James Hodgetts/NY/FRS@FRS, Jan Voigts/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS, Jeanmarie Davis/NY/FRS@FRS, Jeffrey Levine/NY/FRS@FRS, Jennifer Burns/RICH/FRS@FRS, Jim Mahoney/NY/FRS@FRS, John Beebe/RICH/FRS@FRS, John Harvey/NY/FRS@FRS, John Heinze/NY/FRS@FRS, John Ricketti/NY/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD, Jonathan Polk/NY/FRS@FRS, Jordan Pollinger/NY/FRS@FRS, Joseph Galati/NY/FRS@FRS, Joshua Sherwin/NY/FRS@FRS, Judith J Gruttman/NY/FRS@FRS, Kara Sulmasy/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS, Katheryn Van der Celen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS, Kevin Clarke/NY/FRS@FRS, Kevin Coffey/NY/FRS@FRS, Kevin Lee/NY/FRS@FRS, Kirsten Harlow/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS, Lance Auer/NY/FRS@FRS, Lawrence ROSTOKER/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS, Lucinda M Brickler/NY/FRS@FRS, Luis Uranga/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS, Nancy R Berlad/BOARD/FRS@BOARD, Patrick M Parkinson/BOARD/FRS@BOARD, Paul Whynott/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS, Richard Kunen/NY/FRS@FRS, Richard McGee/NY/FRS@FRS, Robert Gutierrez/NY/FRS@FRS, Roger Graham/NY/FRS@FRS, Ronald Stroz/NY/FRS@FRS, Sandy Krieger/NY/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS, Stephanie Chaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS, Theodore Lubke/NY/FRS@FRS, Theonilla LeeBOG-- FOIA 10-251 --001073

Chan/NY/FRS@FRS, Thomas J O'Keeffe/NY/FRS@FRS, Tim P Clark/BOARD/FRS@BOARD, Todd Waszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS, William BRODOWS/NY/FRS@FRS, William Hallacy/NY/FRS@FRS, Wing Oon/NY/FRS@FRS cc James DeFalco/NY/FRS@FRS, Erin Upton/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS, Christopher Hunter/NY/FRS@FRS, Jennifer Tranter/NY/FRS@FRS, Antonino Piscitello/NY/FRS@FRS, Jeffrey Levine/NY/FRS@FRS, Laura Braverman/NY/FRS@FRS, Theonilla LeeChan/NY/FRS@FRS, Benjamin Eddy/NY/FRS@FRS, Barbara Yelcich/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS AIG drawing on its credit line

Subject

Duplicate

BOG-- FOIA 10-251 --001074

From: To: Subject: Date: Attachments:

Lisa Joniaux Jeff Stehm Re: Fw: DTC intraday balance report 09/16/2008 01:22 PM DEPOSITORY TC 20080915.pdf

Not Responsive

OK -

(b)(4) & (b)(8)

Lisa Joniaux CPC for The Depository Trust Company Federal Reserve Bank of New York (212) 720-2530 ▼ Jeff Stehm/BOARD/FRS@BOARD
Jeff Stehm/BOARD/FRS@BOARD

To cc Subject

Lisa Joniaux/NY/FRS@FRS

09/16/2008 01:16 PM

Re: Fw: DTC intraday balance report

Not Responsive

(b)(5)&(b)(8)

(b) (6)

Jeff Stehm Associate Director Federal Reserve Board 202-452-2217 (office) email: jeff.stehm@frb.gov ▼ Lisa Joniaux/NY/FRS@FRS
Lisa Joniaux/NY/FRS@FRS

To cc

Jeff Stehm/BOARD/FRS@BOARD Jeffrey Marquardt/BOARD/FRS@BOARD, Lawrence Sweet/NY/FRS@FRS, Marsha Takagi/NY/FRS@FRS,
BOG-- FOIA 10-251 --001075

09/16/2008 01:07 PM Subject

Susan V Foley/BOARD/FRS@BOARD, William Carlucci/NY/FRS@FRS Re: Fw: DTC intraday balance report

Not Responsive

Lisa Joniaux CPC for The Depository Trust Company Federal Reserve Bank of New York (212) 720-2530 ▼ Jeff Stehm/BOARD/FRS@BOARD
Jeff Stehm/BOARD/FRS@BOARD

To cc

Lisa Joniaux/NY/FRS@FRS, William Carlucci/NY/FRS@FRS Jeffrey Marquardt/BOARD/FRS@BOARD, Lawrence Sweet/NY/FRS@FRS, Marsha Takagi/NY/FRS@FRS, Susan V Foley/BOARD/FRS@BOARD Fw: DTC intraday balance report

09/16/2008 12:18 PM

Subject

(b)(4) & (b)(8)

(b) (6)

Jeff Stehm Associate Director Federal Reserve Board 202-452-2217 (office)
----- Forwarded by Jeff Stehm/BOARD/FRS on 09/16/2008 12:13 PM ----Danielle E Little/BOARD/FRS

email: jeff.stehm@frb.gov

To cc Subject

Jeff Stehm/BOARD/FRS@BOARD DTC intraday balance report

09/16/2008 12:04 PM

Jeff, Please see attached.
BOG-- FOIA 10-251 --001076

Danielle

Danielle Little Federal Reserve Board 202.452.2605 danielle.e.little@frb.gov

BOG-- FOIA 10-251 --001077

Not Responsive

BOG-- FOIA 10-251 --001078

From: To: Cc: Subject: Date:

Coryann Stefansson Diann Townsend; Kwayne Jennings Ron Feldman Re: Additional Exposure Information 09/16/2008 01:22 PM

If you believe u r not getting the information you need this is a fine time to contact the bank directly Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # (b) (6) ▼ Diann Townsend ----- Original Message ----From: Diann Townsend Sent: 09/16/2008 12:20 PM CDT To: Coryann Stefansson; Kwayne Jennings Cc: Ron Feldman Subject: (b)(4), (b)(5), & (b)(8)

Not Responsive

Diann Townsend Supervision, Regulation, and Credit Federal Reserve Bank of Minneapolis 612-204-6130

BOG-- FOIA 10-251 --001079

From: To: Subject: Date:

Ralph Santasiero NY Bank Sup - LFI CPC Updates@FRS BNYM 9/16 Mid-Day Update 09/16/2008 01:24 PM

Here are consolidated notes from discussions held with BNYM mgmt through midday: Credit Update
(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --001080

From: To: Cc: Subject: Date:

Philip Aquilino NY Bank Sup - LFI CPC Updates Michael Johnson; Coryann Stefansson; Nancy J Oakes; Jennifer Su; Jeffrey Plaskett; Fred Minardi; Michele Magidoff; Robert Speaks; Donna O'Kane; Teresa Curran; Steve Hoffman; David M Wright; Jon D Greenlee WFC 9/16 Update (as of 10:15am PST) 09/16/2008 01:28 PM

Restricted F.R.

Credit Risk (Philip Aquilino and Fred Minardi)

AIG

(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --001081

Not Responsive

BOG-- FOIA 10-251 --001082

From: To: Subject: Date:

Jon D Greenlee Sabeth I Siddique; Brian P Valenti Fw: WFC 9/16 Update (as of 10:15am PST) 09/16/2008 01:29 PM

see below - looks like the MAC clauses are going to be invoked. Jon Greenlee Associate Director Board of Governors of the Federal Reserve System Phone (202) 452-2962
Philip Aquilino/SF/FRS@FRS

----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/16/2008 01:29 PM -----

To cc

NY Bank Sup - LFI CPC Updates Michael Johnson/SF/FRS@FRS, Coryann Stefansson/BOARD/FRS@BOARD, Nancy J Oakes/BOARD/FRS@BOARD, Jennifer Su/SF/FRS@FRS, Jeffrey Plaskett/SF/FRS@FRS, Fred Minardi/SF/FRS@FRS, Michele Magidoff/SF/FRS@FRS, Robert Speaks/SF/FRS@FRS, Donna O'Kane/SF/FRS@FRS, Teresa Curran/SF/FRS@FRS, Steve Hoffman/SF/FRS@FRS, David M Wright/SF/FRS@FRS, Jon D Greenlee/BOARD/FRS@BOARD WFC 9/16 Update (as of 10:15am PST)

09/16/2008 01:28 PM

Subject

Restricted F.R.

Credit Risk (Philip Aquilino and Fred Minardi)
Duplicate

BOG-- FOIA 10-251 --001083

From: To: Subject: Date: Importance:

Alain P Chaboud Nathan Sheets; Steven Kamin; Michael Leahy; David H Bowman AIG's ability to trade foreign exchange on EBS (confidential) 09/16/2008 01:34 PM High

(b)(4) & (b)(8)

I spoke to Niall Coffey at FRBNY about this.

BOG-- FOIA 10-251 --001084

From: To: Cc: Subject: Date: Attachments:

JNellie Liang Rita C Proctor; Donald L Kohn; Kevin Warsh; Randall S Kroszner; Elizabeth A Duke Brian F Madigan; Patrick M Parkinson; Daniel M Covitz; Gustavo A Suarez Revised version of memo on commercial paper market conditions 09/16/2008 01:36 PM AIG.CP.091608.pdf

Attached is memo on CP with the charts and tables attached.

BOG-- FOIA 10-251 --001085

(b) (5)

BOG-- FOIA 10-251 --001086

(b) (5)

BOG-- FOIA 10-251 --001087

(b) (5)

BOG-- FOIA 10-251 --001088

(b) (5)

BOG-- FOIA 10-251 --001089

(b) (5)

BOG-- FOIA 10-251 --001090

(b) (5)

BOG-- FOIA 10-251 --001091

(b) (5)

BOG-- FOIA 10-251 --001092

(b) (5)

BOG-- FOIA 10-251 --001093

From: To: Subject: Date:

Scott Alvarez Neel.Kashkari@do.treas.gov Re: fund insert 09/16/2008 01:42 PM

(b) (5)
Thanks! Scott ▼ Neel.Kashkari@do.treas.gov
Neel.Kashkari@do.treas.gov To 09/16/2008 10:17 AM cc Subject Re: fund insert scott.alvarez@frb.gov

Neel,

Duplicate

BOG-- FOIA 10-251 --001094

From: To: Subject: Date:

Elizabeth A Duke Deborah P Bailey Re: Fw: AIG -WFC 9/16 Update (as of 10:15am PST) 09/16/2008 01:53 PM

(b) (5)

▼ Deborah P Bailey/BOARD/FRS
Deborah P Bailey/BOARD/FRS

To

09/16/2008 01:40 PM

Donald L Kohn/BOARD/FRS@BOARD, Randall S Kroszner/BOARD/FRS@BOARD, Elizabeth A Duke/BOARD/FRS@BOARD Fw: AIG -WFC 9/16 Update (as of 10:15am PST)

cc Subject

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/16/2008 01:38 PM ----Jon D Greenlee/BOARD/FRS

Info from our Wells Fargo team.

To cc Subject

Deborah P Bailey/BOARD/FRS@BOARD Fw: WFC 9/16 Update (as of 10:15am PST)

09/16/2008 01:30 PM

Duplicate

BOG-- FOIA 10-251 --001095

From: To: Subject: Date:

Deborah P Bailey Elizabeth A Duke Re: Fw: AIG -WFC 9/16 Update (as of 10:15am PST) 09/16/2008 01:58 PM

(b) (5)

-------------------------Sent from the Blackberry of Deborah Bailey ▼ Elizabeth A Duke ----- Original Message ----From: Elizabeth A Duke Sent: 09/16/2008 01:53 PM EDT To: Deborah Bailey Subject: -WFC 9/16 Update (as of 10:15am PST) (b) (5)

▼ Deborah P Bailey/BOARD/FRS
Deborah P Bailey/BOARD/FRS

To

09/16/2008 01:40 PM

Donald L Kohn/BOARD/FRS@BOARD, Randall S Kroszner/BOARD/FRS@BOARD, Elizabeth A Duke/BOARD/FRS@BOARD Fw: AIG -WFC 9/16 Update (as of 10:15am PST)

cc Subject

Duplicate

BOG-- FOIA 10-251 --001096

From: To: Cc: Subject: Date:

Jennifer A Lucier Marsha Takagi Elizabeth Tafone Re: Fw: Meeting Minutes Payments and Settlement and Tri-Party Calls September 16, 2008 09/16/2008 02:03 PM

Marsha, Liz pointed me in the right direction - here are the draft minutes - bolded text seems consistent with what you mentioned in your earlier message regarding not saying anything too difinitive:
Not Responsive

(b)(4) & (b)(8)

Jennifer A. Lucier Project Leader Clearance and Settlement Systems Federal Reserve Board (202) 872-7581 (office) (b) (6) jennifer.a.lucier@frb.gov ▼ Marsha Takagi/NY/FRS@FRS
Marsha Takagi/NY/FRS@FRS

To cc Subject

Jennifer A Lucier/BOARD/FRS@BOARD Elizabeth Tafone/NY/FRS@FRS Re: Fw: Meeting Minutes Payments and Settlement and Tri-Party Calls September 16, 2008

09/16/2008 01:54 PM

Not Responsive

BOG-- FOIA 10-251 --001097

Not Responsive

BOG-- FOIA 10-251 --001098

Not Responsive

BOG-- FOIA 10-251 --001099

Not Responsive

BOG-- FOIA 10-251 --001100

From: To:

Cc: Subject: Date:

Paul S Webster Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin Lang; Brandon Hall; Brian Begalle; Brian Hefferle; Brian Peters; Bridget Habib; Caroline Nuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; Deborah Lohnau; Dexter Williams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; Jan Voigts; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Harvey; John Heinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; Joshua Sherwin; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kevin Clarke; Kevin Coffey; Kevin Lee; Kirsten Harlow; Kyle Grieser; Lance Auer; Lawrence ROSTOKER; Laxmi Rao; Lucinda M Brickler; Luis Uranga; Mark Scapp; Michael Johnson; Nancy R Berlad; Patrick M Parkinson; Paul Whynott; Randolph Brown; Richard Kunen; Richard McGee; Robert Gutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sarah Dahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; Theodore Lubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon Eric Rosengren; Jim Nolan; Jackie Palladino; Maureen B Savage Fw: RBS Funding Update - 9/16/08 09/16/2008 02:11 PM

----- Forwarded by Paul S Webster/BOS/FRS on 09/16/2008 02:09 PM ----Jennifer Hynes/BOS/FRS

To

09/16/2008 01:12 PM cc Subject

Tony Bardascino/RICH/FRS@FRS, Theresa Barry/BOS/FRS@FRS, Paul S Webster/BOS/FRS@FRS, Scott Strah/BOS/FRS@FRS, Timothy Daniels/BOS/FRS@FRS, Ken Fortier/BOS/FRS@FRS, Erin Long/BOS/FRS@FRS, Chris Haley/BOS/FRS@FRS RBS Funding Update - 9/16/08

Not Responsive

RBS Group:
BOG-- FOIA 10-251 --001101

(b)(4) & (b)(8)

Not Responsive

Jennifer W. Hynes Supervision, Regulation and Credit Department Federal Reserve Bank of Boston 617-973-3827 / 617-662-4747 (tel) 617-973-3265 (fax) jennifer.hynes@bos.frb.org

BOG-- FOIA 10-251 --001102

From: To: Subject: Date: Attachments:

Scully, Robert (FM) kevin.warsh@frb.gov Fw: Market impact 09/16/2008 02:32 PM 2008 09 15 Implications of Bankrupcy.ppt 2008 09 16 To Do List.ppt

Believe these are the docs you requested. ----- Original Message ----From: Ryan, Kevin (GCM) To: Scully, Robert (FM); Juhas, Peter (IBD) Sent: Tue Sep 16 14:27:34 2008 Subject: RE: Market impact See attached. Kevin Ryan, Managing Director Morgan Stanley | Global Capital Markets 1585 Broadway | Floor 04 New York, NY 10036 Phone: +1 212 761-2825 Fax: +1 212 507-2944 Kevin.J.Ryan@morganstanley.com -----Original Message----From: Scully, Robert (FM) Sent: Tuesday, September 16, 2008 2:19 PM To: Ryan, Kevin (GCM); Juhas, Peter (IBD) Subject: Market impact The sheets done last night on market impact, would you forward them to me asap ...with the GSE disclaimer somewhere. Very urgent.

NOTICE: If received in error, please destroy and notify sender. Sender does not intend to waive confidentiality or privilege. Use of this email is prohibited when received in error.

- 2008_09_15 Implications of

Bankrupcy.ppt

- 2008 09 16 To Do List.ppt

BOG-- FOIA 10-251 --001103

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --001104

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --001105

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --001106

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --001107

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --001108

(b)(4) & (b)(5)

BOG-- FOIA 10-251 --001109

From: To: Subject: Date:

Coryann Stefansson David Gibson; BSR LIG Re: Breakout of Lehman and AIG exposures 09/16/2008 02:45 PM

I think there may already exist the list for the lfis... Coryann Stefansson Associate Director Bank Supervision and Regulation Work # 202 452 5287 Cell # (b) (6) ▼ David Gibson ----- Original Message ----From: David Gibson Sent: 09/16/2008 02:30 PM EDT To: BSR LIG Subject: Breakout of Lehman and AIG exposures

Good afternoon everyone,

A new project of high priority is in play.

(b) (5) and (b) (8)

The deadline is 4:30, this will hopefully give me enough time to summarize and turn it in by the time it is due to management (due to management: COB TODAY). Thank you David W. Gibson Jr. Large Institutions Group Banking Supervision & Regulation Phone: 202-530-6209

BOG-- FOIA 10-251 --001110

From: To: Subject: Date: Attachments:

Michelle A Smith

(b) (6)
Fw: Rita, please bring five copies in for Michelle Smith please. 09/16/2008 02:49 PM Rationale.doc

Emailing this to bb's desk, in case I need to edit it in here.

From: Calvin.Mitchell Sent: 09/16/2008 02:44 PM AST To: Michelle Smith; Rita Proctor Subject: Rita, please bring five copies in for Michelle Smith please. Thanks. Calvin Mitchell

- Rationale.doc

BOG-- FOIA 10-251 --001111

(b) (5)

BOG-- FOIA 10-251 --001112

From: To: Cc: Subject: Date:

Theodore Lubke Lawton, John C. Jennifer A Lucier; Lawrence Sweet Re: aig 09/16/2008 03:07 PM

John - Thank you for this. Are you still around here or are you in DC? I'd like to discuss. Theo Lubke Senior Vice President Bank Supervision Group Federal Reserve Bank of New York theodore.lubke@ny.frb.org tel: 212-720-6334 fax: 212-720-7818 http://www.newyorkfed.org ▼ "Lawton, John C." <jlawton@CFTC.gov>
"Lawton, John C." <jlawton@CFTC.gov>

To cc

<william.rutledge@ny.frb.org>, <theodore.lubke@ny.frb.org> "Lukken, Walter" <wlukken@CFTC.gov>, "Loesch, Michael" <MLoesch@CFTC.gov>, "Radhakrishnan, Ananda" <ARadhakrishnan@CFTC.gov>, "Smith, Thomas J." <tsmith@CFTC.gov>, "Wasserman, Robert B." <rwasserman@CFTC.gov>, "Markman, Natalie A." <nmarkman@CFTC.gov> aig

09/16/2008 02:54 PM

Subject

Michael Loesch asked me to pass on the following info.

(b) (5)

BOG-- FOIA 10-251 --001113

From: To: Subject: Date:

Michelle A Smith Calvin Mitchell Re: Where do we stand? 09/16/2008 03:15 PM

It was just approved by the board. Terms are going to aig now. Aig has a board mtg at 5. ▼ Calvin.Mitchell ----- Original Message ----From: Calvin.Mitchell Sent: 09/16/2008 03:17 PM AST To: Michelle Smith Subject: Where do we stand?

BOG-- FOIA 10-251 --001114

From: To: Subject: Date: Attachments:

Brian F Madigan Michelle A Smith AIG note 09/16/2008 03:28 PM Background for Decision to Lend to AIG.doc

This could use some further work.

BOG-- FOIA 10-251 --001115

(b) (5)

BOG-- FOIA 10-251 --001116

From: To: Subject: Date: Attachments:

Rich Ashton Mark VanDerWeide; Sophia H Allison Fw: Revised AIG Term Sheet 09/16/2008 06:43 PM 2008 09 16 Term Sheet.doc DV Comparison 2008 09 16 Term Sheet.080916 1316-2008 09 16 Term Sheet.rtf AIG resolution II.doc

This is what the Board adopted today. At this point its just an authorization. Not sure any decision to lend has been made as of yet.
Scott Alvarez/BOARD/FRS

----- Forwarded by Rich Ashton/BOARD/FRS on 09/16/2008 06:40 PM -----

To cc Subject

Rich Ashton/BOARD/FRS@BOARD Fw: Revised AIG Term Sheet

09/16/2008 03:42 PM

----- Forwarded by Scott Alvarez/BOARD/FRS on 09/16/2008 03:42 PM ----Jeremiah.Norton@do.treas.gov To 09/16/2008 02:28 PM cc Subject Fw: Revised AIG Term Sheet scott.alvarez@frb.gov

Duplicate

BOG-- FOIA 10-251 --001117

RESOLUTION Given the unusual and exigent circumstances and pursuant to section 13(3) of the Federal Reserve Act, the Board authorizes the Federal Reserve Bank of New York to extend credit to American International Group, Inc. (AIG) or any of its subsidiaries if the New York Reserve Bank obtains evidence that the borrower is unable to secure adequate credit accommodations from other banking institutions.

The credit should be secured to the satisfaction of the Reserve Bank, and should not exceed a period of 24 months, subject to extension by the Reserve Bank after consultation with the Board. The New York Reserve Bank may, as it deems appropriate, impose conditions, such as those described in its proposed lending facility term sheet, on its extension of credit to AIG.

The Board approves the recommendation of the Federal Reserve Bank of New York that the credit to AIG be extended at the credit rates in the Reserve Bank’s proposed lending facility term sheet.

BOG-- FOIA 10-251 --001118

From: To: Subject: Date: Attachments:

James A Clouse William R Nelson Fw: Raw Materials for our early morning meeting with Tim. 09/17/2008 09:25 AM Proposal to Reinsure Stable Value Fund Business for AIG.doc Systemic Issues in AIG failure.doc Systemic Impact of AIG Bankruptcy.DOC Pros and Cons of Lending to AIG.doc Retail nature.doc LEGALDOCS-#283317-v3-One Pager re AIG Bankruptcy Considerations.DOC Summary of AIG's market risk positioning.doc AIG Summary 16 September 2008.doc

jclouse@frb.gov cell: 703-304-6276 blackberry: 202-390-3521

----- Forwarded by James A Clouse/BOARD/FRS on 09/17/2008 09:26 AM ----Alejandro LaTorre/NY/FRS@FRS

To cc Subject

James A Clouse/BOARD/FRS@BOARD Fw: Raw Materials for our early morning meeting with Tim.

09/17/2008 09:00 AM

Jim, These are the documents. If there are questions, or I can be of assistance, let me (b) (5) know. Regards, Alex.

----- Forwarded by Alejandro LaTorre/NY/FRS on 09/17/2008 08:54 AM ----Alejandro LaTorre/NY/FRS

To cc

Michael Silva/NY/FRS, Meg McConnell/NY/FRS Adam Ashcraft/NY/FRS@FRS, Alejandro LaTorre/NY/FRS@FRS, Alexa Philo/NY/FRS@FRS, Alexander J Psomas/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS, Christopher Calabia/NY/FRS@FRS, Danielle Vicente/NY/FRS@FRS, Denise Goodstein/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS, Erika Gottfried/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, Kevin Coffey/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, Min Kim/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS, Azish Filabi/NY/FRS@FRS, James Hennessy/NY/FRS@FRS Raw Materials for our early morning meeting with Tim.

09/16/2008 01:08 PM

Subject

BOG-- FOIA 10-251 --001119

To be ensure we all have the same docs; am sending around what I've received as input into Tim's summary document from yesterday. If I've left something out please distribute to the group. I'll defer to banksup as to whether they want to circulate exposure figures as this is confidential.

- AIG Summary 16 September 2008.doc

BOG-- FOIA 10-251 --001120

(b) (5)

-1-

BOG-- FOIA 10-251 --001121

(b) (5)

-2-

BOG-- FOIA 10-251 --001122

(b)(4) & (b)(5)

-3-

BOG-- FOIA 10-251 --001123

(b) (5)

BOG-- FOIA 10-251 --001124

(b) (5)

BOG-- FOIA 10-251 --001125

(b) (5)

BOG-- FOIA 10-251 --001126

(b) (5)

BOG-- FOIA 10-251 --001127

(b) (5)

BOG-- FOIA 10-251 --001128

(b) (5)

1

BOG-- FOIA 10-251 --001129

(b) (5)

2

BOG-- FOIA 10-251 --001130

(b) (5)

BOG-- FOIA 10-251 --001131

(b) (5)

BOG-- FOIA 10-251 --001132

(b) (5)

BOG-- FOIA 10-251 --001133

(b) (5)

BOG-- FOIA 10-251 --001134

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