You may have read in today's New York Times about the House of Representatives' grilling of U.S. Secretary of State Timothy Geithner about his role in the $85 billion federal bailout loan to American International Group (AIG) in September 2008. At the time of the financial rescue, Secretary Geithner was head of the New York Federal Reserve Bank. The loan protected big banks from losses, the Times article describes, "but saddled A.I.G. with a debt so crushing that the Treasury soon had to step in and provide even more rescue money." During the hearing, Geithner insisted that he was not involved in covering up any information about deals with big banks. Nevertheless, House representatives berated him for what they considered to be bad decisions. One congressman even suggested that Geithner resign from his current position.
"The Federal Bailout of AIG" hearing is still taking place as I am writing this blog post. See the website of the House Committee on Oversight and Government Reform for a live webcast of the hearing. Witnesses testifying include Geithner, former Treasury Secretary Henry Paulson, Neil Barofsky of the Troubled Asset Relief Program, and AIG's Elias Habayeb, among others.
If you need background information after watching the hearing, take a look at our guide to Economic Crisis and Stimulus.
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