Defendant Federal Reserve Document Production on AIG from Sept 2008 Heavy Redactions (Lawsuit #3)

From:To: [email protected]; [email protected]; [email protected]: Our biggest worry hereDate: 09/12/2008 07:10 AM

AIG traded up to 755 for 5 yr CDS---t the one that worriesour head of overall credit trading -- the most.

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From: Patrick M ParkinsonTo: Brian MadiganSubject: AIGDate: 09/12/2008 09:10 AM

Sounds like they are getting nervous. Pat

BOG-- FOIA 10-251 --000002

From: [email protected]: [email protected]: Re: AIGDate: 09/12/2008 09:30 AM

Do you have some text on this?

[email protected]/12/2008 09:10 "Brian Madigan"AM <[email protected]>

cc

SubjectAIG

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From: Patrick M ParkinsonTo: Brian F MadiganSubject: Re: AIGDate: 09/12/2008 09:32 AM

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

----- Original Message -----From: Brian.F.MadiganSent: 09/12/2008 09:30 AM ASTTo: Patrick ParkinsonSubject: Re: AIG

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From:To: [email protected]; [email protected]; [email protected]: RE: I am getting a lot of questions from Investors about AIGDate: 09/12/2008 10:13 AM

It kinda feels like the market is melting down again for financials. Govt RP now bid at2.40/offered at 2.30.

_____________________________________________ From: Sent: Friday, September 12, 2008 9:30 AM To: '[email protected]'; ' ([email protected])' Subject: I am getting a lot of questions from Investors about AIG Importance: High

**Besides the repo market very sloppy today, I am getting investors coming inasking me if AIG is having any trouble rolling their CP. Just fyi. Their stock isgetting hit hard this morning again I believe

Repo under huge upward pressure this morning due most likely to the LEHsituation. I am sure you saw the stops yesterday in the repos that generated ahuge spike in repo into the close yesterday, so starting out very high todaywith market fears of funding. Just fyi

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From: Deborah P BaileyTo: William B EnglishCc: Jon D GreenleeSubject: Re: AIGDate: 09/12/2008 12:00 PM

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

William BEnglish/BOARD/FRS

09/12/2008 11:55 AM

To Deborah P Bailey/BOARD/FRS@BOARD

cc

Subject AIG

Deborah-

Do you guys have an expert on AIG? I thought I would ask beforeasking one of my folks to look into them, just to be sure we are notduplicating work.

Thanks,Bill E.

BOG-- FOIA 10-251 --000006

From: Jon D GreenleeTo: Deborah P BaileyCc: William B EnglishSubject: Re: AIGDate: 09/12/2008 12:55 PM

Bill,

We don't have an expert on the company, but I do believe we have done some workon their credit exposures. I will see what we have and share it with you.

Jon

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Deborah P Bailey/BOARD/FRS

Deborah PBailey/BOARD/FRS

09/12/2008 12:00 PM

To William B English/BOARD/FRS@BOARD

cc Jon D Greenlee/BOARD/FRS

Subject Re: AIG

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BOG-- FOIA 10-251 --000007

From: Jon D GreenleeTo: Sabeth I SiddiqueSubject: Fw: AIGDate: 09/12/2008 12:58 PM

Anyone in your group know much about AIG? I imagine we've looked at some oftheir credit exposures but not much else. Is there anything we can share?

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/12/2008 12:57 PM -----


09/12/2008 12:00 PM



Subject Re: AIG

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From:To: [email protected]; [email protected]; [email protected]: RE: I am getting a lot of questions from Investors about AIG: UpdateDate: 09/12/2008 01:05 PM

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

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BOG-- FOIA 10-251 --000009

From: Maria G PerozekTo: William B EnglishSubject: Re: AIGDate: 09/12/2008 01:10 PM

Hi Bill--I have been completely swamped with forecast issues, so I am afraid I amnot going to be much help at the moment on recent developments at AIG. After mymemo goes out this afternoon, I will do some research and get back to you.

Best,Maria▼ William B English/BOARD/FRS


09/12/2008 11:56 AM

To Maria G Perozek/BOARD/FRS@BOARD

cc

Subject AIG

Hi Maria-

What do you know about AIG? Have you produced memos on themanytime recently? They appear to be under much more stress in thepast few days, and I would like to know more about them.

Thanks,Bill E.

BOG-- FOIA 10-251 --000010

From: Gustavo A SuarezTo: JNellie Liang; Daniel M CovitzSubject: Fw: I am getting a lot of questions from Investors about AIG: UpdateDate: 09/12/2008 01:14 PM

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

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

09/12/2008 01:05 PM

To <[email protected]>,<[email protected]>,<[email protected]>

cc

Subject RE: I am getting a lot of questions from Investorsabout AIG: Update

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

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From: JNellie LiangTo: Patrick Parkinson; Brian MadiganCc: Gustavo SuarezSubject: Fw: I am getting a lot of questions from Investors about AIG: UpdateDate: 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

reports that several investors are asking her to bid back on CPissued by AIG. (b) (4)

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BOG-- FOIA 10-251 --000012

From: Patrick M ParkinsonTo: JNellie Liang; Brian F MadiganCc: Gustavo A SuarezSubject: Re: I am getting a lot of questions from Investors about AIG: UpdateDate: 09/12/2008 01:23 PM

Consistent with other rumblings. Pat

----- Original Message -----From: JNellie.LiangSent: 09/12/2008 01:22 PM ASTTo: Patrick Parkinson; Brian MadiganCc: Gustavo SuarezSubject: Fw: I am getting a lot of questions from Investors about AIG:Update

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From: [email protected]: [email protected]; [email protected]: AIGDate: 09/12/2008 03:00 PMImportance: High

Trish Mosser just called. AIG is coming to FRBNY this afternoon. Evidentlythey 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 likelytomorrow morning. So I am going to point Trish in your direction.

Pat

BOG-- FOIA 10-251 --000014

From: Fabio M NatalucciTo: Roberto PerliCc: Fabio M NatalucciSubject: AIG collateral posting in case of a downgrade--based on their Aug 6 10-QDate: 09/12/2008 04:20 PM

A significant portion of AIGFP’s guaranteed investment agreements (GIAs) and financialderivative transactions include provisions that require AIGFP, upon a downgrade of AIG’slong-term debt ratings, to post collateral or, with the consent of the counterparties, assign orrepay its positions or arrange a substitute guarantee of its obligations by an obligor withhigher debt ratings.

It is estimated that, as of the close of business on July 31, 2008, based on AIGFP’soutstanding municipal GIAs and financial derivative transactions at that date, adowngrade 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 toapproximately $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 additionalcollateral. 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 agencieswould permit counterparties to call for up to approximately $1.1 billion of additionalcollateral.

Furthermore, a downgrade of AIG’s long-term senior debt ratings to ‘A1’ by Moody’sor to the same levels by both rating agencies would permit either AIG or thecounterparties to elect early termination of contracts resulting in payments of up toapproximately $4.6 billion, while a downgrade to ‘A2’ by Moody’s and ‘A’ by S&Pwould permit either AIG or the counterparties to elect early termination of additionalcontracts resulting in additional payments of up to approximately $800 million. AIGFPbelieves that it is unlikely that certain of these counterparties would exercise their rights toelect termination of their contracts given the substantial economic benefit that suchcounterparties would forfeit upon termination.

The actual amount of collateral that AIGFP would be required to post to counterparties in theevent of such downgrades, or the aggregate amount of payments that AIG could be requiredto make, depends on market conditions, the fair value of outstanding affected transactionsand other factors prevailing at the time of the downgrade. Additional obligations to postcollateral or the costs of assignment, repayment or alternative credit support would increasethe demands on AIG’s liquidity. Further downgrades could result in requirements forsubstantial additional collateral, which could have a material adverse effect on AIG’sliquidity.

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From: Fabio M NatalucciTo: Roberto PerliSubject: Bloomberg story on AIGDate: 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, mayaccelerate 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 hisSept. 25 deadline said the person, who declined to be named because the New York-basedinsurer hasn't made an official statement. AIG may be able to raise $20 billion selling assetsincluding its consumer finance, reinsurance and plane-leasing units, according to analysts atCitigroup Inc.

AIG shares slumped and the cost of insuring its debt rose to a record today on concern thatthe company may be the next big U.S. financial firm after Lehman Brothers Holdings Inc. torun short of capital. AIG spokesman Joe Norton declined to comment on the reorganizationplans.

`Ìt'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.`Ìt's unprecedented that two storied franchises, Bear Stearns and Lehman, have taken on thetype 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 Exchangecomposite trading. The price of credit- default swaps, used as hedges against losses on baddebt, approached distressed levels and traded higher than those for Lehman, the securitiesfirm that's fighting for survival.

Raising Capital

The insurer raised $20.3 billion in May by selling debt and equity, diluting the holdings oflong-time investors. It's ``very hard to predict'' if AIG will need more capital, Willumstadsaid Aug. 7.

`Às 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 ane-mail.

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The insurer disclosed in an Aug. 6 filing that a ratings cut may have ``a material adverseeffect on AIG's liquidity.'' The company was forced to put up $16.5 billion in collateralthrough 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 securitiestied to subprime mortgages.

Credit-Default Swaps

Most of the valuation declines on the swaps will reverse and AIG may have to pay $8.5billion 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 theunit sold for twice its book value. AIG Investments could sell for more than $3 billion if itsold for 2.5 percent of clients' assets under management. The stake in reinsurer TransatlanticHoldings 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 thedecision to keep its aircraft- leasing unit, which could sell for $7 billion to $14 billion.

BOG-- FOIA 10-251 --000017

From:To: [email protected]; [email protected]; [email protected]: AIG: UpdateDate: 09/12/2008 05:22 PM

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

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From: Gustavo A SuarezTo: JNellie Liang; Daniel M Covitz; Patrick M ParkinsonSubject: Fw: AIG: UpdateDate: 09/12/2008 05:25 PM


09/12/2008 05:22 PM

To <[email protected]>,<[email protected]>,<[email protected]>

cc

Subject AIG: Update

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

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From: Deborah P BaileyTo: Patrick M ParkinsonCc: Brian F Madigan; Scott Alvarez; Jon D GreenleeSubject: Re: AIGDate: 09/12/2008 05:35 PM

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

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 paymentson Monday.

Pat▼ Deborah P Bailey/BOARD/FRS


09/12/2008 05:16 PM

To Patrick M Parkinson/BOARD/FRS@BOARD

cc

Subject AIG

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

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From: Michael S GibsonTo: Patrick M ParkinsonSubject: Re: AIGDate: 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 toTrish, 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 MTMwritedowns of $25 billion on super senior ABS CDOs ($80 billion notional). Theyhave posted $16.5 billion of collateral. Their CSAs do have rating-based triggers forcollateral. For them as for others, MTM writedowns will become realized losses asthe CDOs liquidate, which (market-wide) is happening gradually.

MG

▼ [email protected]

[email protected]

09/12/2008 03:00 PM

To [email protected],[email protected]

cc

Subject AIG

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From: Patrick M ParkinsonTo: Michael S GibsonSubject: Re: AIGDate: 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 thederivative products sub. Pat▼ Michael S Gibson/Board/FRS

Michael SGibson/Board/FRSSent by: Michael SGibson/BOARD/FRS

09/12/2008 05:35 PM


cc

Subject Re: AIG

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From: Lyle KumasakaTo: Brian F Madigan; James A Clouse; William B English; William R Nelson; Roberto PerliSubject: AIG FSBDate: 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)CAMELS comp.

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

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BOG-- FOIA 10-251 --000023

From: Patricia MosserTo: 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 SGibson

Cc: [email protected]: AIG meeting this afternoonDate: 09/12/2008 05:44 PMAttachments: AIG Meeting Notes.doc

Restricted FR2

AIG Meeting NotesSeptember 12, 2008

AIG – Jacob Frenkel (Vice Chairman), Steve Bensinger (CFO), David Herzog (SVP& Comptroller), Robert Gender (VP & Treasurer), Alan Pryor (EVP – FinancialServices 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 onMonday September 15 (currently rated AA3, downgraded at least one notch)… S&Palready has AIG on negative watch (as of today)… Fitch already has AIG onnegative watch.

Rating triggers: GICs are issued out of AIG-Financial Products (AIG-FP), insured by the holdingcompany.

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 inliquidity needs)downgrade by 2 rating agencies – additional $3B in liquidity needsIf downgraded, they must post half of the additional collateral within 2 days, andthe other half in 10 days.

Markets are also punishing AIG. Stock prices are off about 40% today, and CDS istraded 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 thesecured (repo) borrowing markets

AIG is having problems rolling its commercial paper (CP). $2.5B in CP maturedtoday, but they were able to roll only $1.1B, the remaining $1.4B was funded out ofthe parent.

AIG has a total of about $15B in CP, which has backstop (backup linesof credit) from a consortium of banks; AIG may have to draw on lineson Monday, which is a material event and so will become publiclyknown and have negative implications.AIG also has ABCP facilities of about $5B, and these have no backuplines

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 ofbeing perceived as a weak counterparty and risky, illiquid collateral is resulting incounterparties 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 lendingcounterparties turn away from the AIG name.

Mobility of liquidity – most cash within the organization is ‘trapped’ in regulatedentities and is not freely transferable to AIG holding company or AIG FinancialProducts (the derivatives and trading sub) for its liquidity needs. Today, the holding company started with $9B in liquidity, used $1.4 for CP, butwas 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 beforethey 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 marketsinto which to sellEquity issuance – not viable at this time – 3 months ago, AIG raised $20B incapital. It is all gone.Holding company has about $12B in ‘Fed-eligible’ assets (that is, PDCFcollateral… 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 therestrictions on pledging those are very unclear.

Unwinding in event of bankruptcy is likely to be very messy, because derivativesbook 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 alreadyfacing is very aggressive marks from counterparties and strategic unwinding of “inthe money” positions, and this will likely accelerate in coming days adding to the cashdrain. Their super senior CDO book is about $80 bn and at present they haveapproximately $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 borrowfrom DW. Recently they drew up a plan to become a primary dealer over a 6-12month period, but obviously do not have the time to implement that plan. Theyexplicitly asked about how to obtain an IPC 13-3 loan. They are very willing to opentheir books to us, and give us a better sense of their risk profile, the complexity oftheir book and detailed liquidity profile as soon as possible (ie this weekend.)

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BOG-- FOIA 10-251 --000026

Restricted FR

1

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

Restricted FR

2

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

From: Patricia MosserTo: Michael S Gibson; [email protected]; Jon D GreenleeCc: Patrick M ParkinsonSubject: followup with AIGDate: 09/12/2008 05:47 PM

Jon and Mike,

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

BOG-- FOIA 10-251 --000029

From: Gustavo A SuarezTo: [email protected]: Gustavo A SuarezSubject: Re: I may need some help AIGDate: 09/12/2008 06:22 PM

Nellie,

Sorry I missed your call. I gathered some basic facts about unsecured CP by AIG and its 3sponsored 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


[email protected]

09/12/2008 06:04 PM

To [email protected]

cc

Subject Re: I may need some help AIG

Thanks, I think we're free for the weekend. Monday might be hectic.

Gustavo.A.Suarez@ frb.gov To 09/12/2008 05:24 [email protected] PM cc

Subject Re: I may need some helpAIG

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BOG-- FOIA 10-251 --000030

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

[email protected]

09/12/2008 05:22 PM To "GustavoSuarez" <[email protected]> cc

Subject I may need some helpAIG

What time are you leaving?--------------------------------------------------------------------------------

--Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000031

From: Patricia MosserTo: Jon D GreenleeCc: Ms. Deborah P Bailey; Jim Mahoney; Michael S Gibson; Patrick M ParkinsonSubject: Re: followup with AIGDate: 09/12/2008 06:24 PM

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

▼ Jon D Greenlee/BOARD/FRS@BOARD

Jon DGreenlee/BOARD/FRS@BOARD

09/12/2008 06:03 PM

To Michael S Gibson/BOARD/FRS@BOARD,Patricia Mosser/NY/FRS@FRS

cc Jim Mahoney/NY/FRS@FRS, Patrick MParkinson/BOARD/FRS@BOARD, "Ms.Deborah P Bailey"<[email protected]>

Subject Re: followup with AIG

I have an 11 AM call and one at 1 PM, but I can miss those ifnecessary.

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 timefor a call.

Mike

▼ Patricia Mosser/NY/FRS@FRS

Duplicate

BOG-- FOIA 10-251 --000032

From: William R NelsonTo: Deborah P Bailey; Brian F Madigan; James A Clouse; Daniel M Covitz; William B English; Gustavo A SuarezSubject: some additional info on AIGDate: 09/12/2008 06:24 PMAttachments: 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 beavailable 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: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542

BOG-- FOIA 10-251 --000033

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aig: Individual Firm Information

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

MFST | Important Institutions

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From: Jon D GreenleeTo: Patricia MosserCc: Deborah P Bailey; Jim Mahoney; Michael S Gibson; Patrick M ParkinsonSubject: Re: followup with AIGDate: 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 intonight to start the process. Any chance you could call in at about 8pm or so tonight?

Duplicate

BOG-- FOIA 10-251 --000043

From: Deborah P BaileyTo: Donald L Kohn; Randall S Kroszner; Kevin Warsh; Elizabeth A DukeCc: Scott Alvarez; Roger ColeSubject: Fw: AIG meeting this afternoonDate: 09/12/2008 06:31 PMAttachments: AIG Meeting Notes.doc

The consolidated supervisor is OTS. The holding company is rated the thrift a and a trust company Talking to the OTS now....

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/12/2008 06:06 PM -----

PatriciaMosser/NY/FRS@FRS

09/12/2008 05:44 PM

To Timothy Geithner/NY/FRS@FRS, Brian FMadigan/BOARD/FRS@BOARD, Patrick MParkinson/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD, Arthur Angulo/NY/FRS,William Dudley/NY/FRS, WilliamRutledge/NY/FRS@FRS@NY, Sarah Dahlgren/NY/FRS,Brian Peters/NY/FRS, Meg McConnell/NY/FRS@FRS,Thomas Baxter/NY/FRS, Michael SGibson/BOARD/FRS@BOARD

cc [email protected]

Subject AIG meeting this afternoon

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BOG-- FOIA 10-251 --000044

From: Brian F MadiganTo: James A Clouse; William B English; William R Nelson; Richard Perl; Daniel M Covitz; Gustavo A SuarezCc: Brian F MadiganSubject: AIGDate: 09/12/2008 06:33 PMAttachments: AIG Meeting Notes.doc

Restricted Controlled (FR)

----- Forwarded by Brian F Madigan/BOARD/FRS on 09/12/2008 06:31 PM -----


09/12/2008 05:44 PM




Restricted FR2

AIG Meeting NotesSeptember 12, 2008

Duplicate

BOG-- FOIA 10-251 --000045

From: Patricia MosserTo: [email protected]; Alejandro LaTorre; Catherine Voigts; Jon D Greenlee; Paul Whynott; Michael S GibsonCc: Brian Peters; Deborah P BaileySubject: AIGDate: 09/12/2008 06:43 PM

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

BOG-- FOIA 10-251 --000046

From: Patricia MosserTo: Catherine VoigtsCc: Alejandro LaTorre; Brian Peters; Deborah P Bailey; Jim Mahoney; Jon D Greenlee; Michael S Gibson; Paul

WhynottSubject: Re: AIGDate: 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 ChmSteven Bensinger, Vice Chm, AIG financial services, and CFO

Call-in information:

1-866-703-9405code: 963870

▼ Catherine Voigts/NY/FRS

CatherineVoigts/NY/FRS

09/12/2008 06:52 PM

To Patricia Mosser/NY/FRS@FRS, JimMahoney/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD, PaulWhynott/NY/FRS@FRS, Michael SGibson/BOARD/FRS@BOARD

cc Brian Peters/NY/FRS@FRS, Deborah PBailey/BOARD/FRS@BOARD

Subject Re: AIG

PatComing in from CT _ shall I go ahead and commit to gettimg carservice and head in?Cathy-------------------------Sent from my BlackBerry917-208-0504

▼ Patricia Mosser

----- Original Message ----- From: Patricia Mosser Sent: 09/12/2008 06:47 PM EDT To: Jim Mahoney; Alejandro LaTorre/NY/FRS@FRS@NY; CatherineVoigts; Jon Greenlee; Paul Whynott; Michael Gibson Cc: Brian Peters; Deborah Bailey

Duplicate

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From: Patricia MosserTo: Catherine VoigtsCc: Alejandro LaTorre; Brian Peters; Deborah P Bailey; Jim Mahoney; Jon D Greenlee; Michael S Gibson; Paul

WhynottSubject: Re: AIGDate: 09/12/2008 07:01 PM

Meeting is at AIG, 70 Pine Street.

▼ Catherine Voigts/NY/FRS

Duplicate

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From: William R NelsonTo: William B EnglishSubject: Fw: AIGDate: 09/12/2008 09:44 PMAttachments: AIG Meeting Notes.doc

What can I do to help at this point. I called Brian an hour ago and he was on aconference call. Do you know what that was about?

Also, do you think he meant to send this to Richard Perl, or did he just perhapsmistype "perli"? I was thinking of sending it to Robero.

bn

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542----- Forwarded by William R Nelson/BOARD/FRS on 09/12/2008 09:43 PM -----

Brian FMadigan/BOARD/FRS

09/12/2008 06:33 PM

To James A Clouse/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, RichardPerl/NY/FRS@FRS, Daniel MCovitz/BOARD/FRS@BOARD, Gustavo ASuarez/BOARD/FRS@BOARD

cc Brian F Madigan/BOARD/FRS@BOARD

Subject AIG




09/12/2008 05:44 PM




Restricted FR2

AIG Meeting Notes Meeting Notes are Duplicates

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From: Jon D GreenleeTo: William B EnglishSubject: AIG CallDate: 09/12/2008 09:52 PM

Not a lot new from Trish's note. Some more details on counterparties andderivatives. They expect a ratings downgrade early next week, they plan to draw ontheir backup lines which will give them enough liquidity to get them to the 26th or29th. They expect if counterparties begin to pull away, it will happen quickly andthey could be run out of liquidity in a couple of days. Counterparties are pullingaway and they can't add borrowing capacity.

Trapped liquidity is a big issue. They have spoken with NY State insurancecommissioner about ways to get money out of insurance sub. They areinvestigating, but cash is there to protect policy holders. Probably only feasible ifFed lends to isnurance sub and they can move it to the HC (can't repo). They havesome capacity to move cash out, but only about $3 billion or so, but subs don't havecash and are having trouble selling assets.

$68 billion in Sec Lending business - worry is about rolling it over. Business is in theinsurance 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 startingtomorrow), 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 ownbanks in Poland, Hong Kong, and other locations.

Derivatives book is huge, they sponsor some ETFs (commodities) and they have a lotof counterparties. Most worried about behavior of counterparties and whether therecould be an acceleration of payments without netting. Concentration is in 12 majorinternationally 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 donethrough CLS.

FRBNY is getting the detailed reports.

Brian Madigan was on the call as well.

Jon

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962

BOG-- FOIA 10-251 --000050

From: Brian F MadiganTo: Patrick M ParkinsonSubject: AIGDate: 09/12/2008 10:55 PM

We (NY and Board staff) had a conf call with AIG this evening. The situation seemsvery 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: William R NelsonTo: Roberto PerliSubject: Fw: AIGDate: 09/12/2008 11:34 PMAttachments: 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 justdon't think we can lend. It seems like it would have to be the Treasury. If we thinkthe entity is insolvent, can you think of anyway to make the failure more orderly?

Bill



09/12/2008 06:33 PM

To James A Clouse/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, RichardPerl/NY/FRS@FRS, Daniel MCovitz/BOARD/FRS@BOARD, Gustavo ASuarez/BOARD/FRS@BOARD


Subject AIG




09/12/2008 05:44 PM




Restricted FR2

AIG Meeting NotesMeeting Notes are Duplicates

BOG-- FOIA 10-251 --000052

From: [email protected]: Kevin WarshSubject: Fw: Update on AIGDate: 09/12/2008 11:52 PM

Fyi, in case today wasn't depressing enough...--------------------------Margaret M. McConnellFederal Reserve Bank of New York212-720-8773

----- Original Message -----From: Alejandro LaTorreSent: 09/12/2008 11:48 PM EDTTo: 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 MahoneySubject: Update on AIG

We met with senior executives at AIG to discuss both their liquidity andrisk exposure situation. These included the CEO, CFO, General Counsel,Treasurer and many others. Below are the important highlights ... ScottAlvarez, Deborah Bailey, Jim Clouse, Mike Gibson and Brian Madigan from theBoG also participated.

The key takeaway is that they are potentially facing a severe run on theirliquidity over the course of the next several (approx. 10) days if they aredowngraded by Moodys and S&P early next week. They anticipate downgradescould happen as early as Monday. Their risk exposures are concentratedamong the 12 largest international banks (both U.S. and European) across awide array of product types (bank lines, derivatives, securities lending,etc.) meaning their could be significant counterparty losses to thosefirms in the event of AIG's failure. They estimate that they might haveto pay out $18.6B across the firm over the course of next week if they weredowngraded.

I. Liquidity

Breakdown of the $18.6B is:Failed rolls on ABCP: $4.7BCollateral posting on Muni GICs: $6BCollateral posting on Structured Lease GICs: $3BCollateral posting in derivatives contracts: $5B

As of close of business today, they have $8B in cash at the holdingcompany. They are experiencing significant difficulties in rolling theirprograms and have used some of their holding company cash to pay down therolls. Their CP lines are backstopped by banks and if they were to drawdown, this would mean banks have to fund $15B in credit. They expressedconcern that banks might object to fund and take legal recourse to preventfrom doing so; or more likely they would restrict credit on otherexposures (e.g., trading lines). They also have $4.7B in ABCP programswhich are not backstopped. They have enough liquidity to last until Sept.26th.

Outside of the holding co., the insurance subs have about $68B insecurities lending liabilities to the 12 largest firms. Program ismanaged by the holding company (AIG Financial Products). In principle theycould use these assets for repo: in practice they do not believe that repoof assets is viable b/c the assets are mostly non-agency mortgages and notvery desirable. They have lending facilities from the insurancesubsidiary to the holding company of $4.9B. They discussed with NYSIDSuperintendent Dinallo whether they could free up liquidity in excess ofthe $4.9B to the holding co. Some of the subs have large muni andcorporate portfolios that would have to be sold to free up liquidity,meaning not all have excess liquidity. They suggested that Dinallo wasamenable to freeing up more liquidity.

BOG-- FOIA 10-251 --000053

They have so far made about $1B in collateral postings on derivatives overthe past week; 1 bank has also cut down their overdraft lines limitingtheir ability to move funds across legal entities.

They have no concrete plans to generate near-term liquidity and longer-termplans in their early stages. These longer term plans include a privateequity capital raise coupled with asset sales. Interested parties wouldbe performing due diligence starting tomorrow and into sunday.

They are also large issuers of annuities and have $11B of contingentexposure in their domestic retirement services business. These are retailbut run by large sponsors who could encourage accounts to put back theannuities in exchange for cash if they lose confidence in AIG. Thesesponsors are U.S. banks who have exposure elsewhere. This could be ontop of the $18B payout above. They have similar exposures in Japan butcould not quantify the size.

They also have a sterling-denominated money market account of $10B and anexchange traded fund in commodities with $3B (run by a sponsor) inliquidity 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 12major dealers.

Commodities: index book of $25B; swaps on futures contracts where they arelong futures contracts to hedge; post variation margin of approx. $2B toNYMEX; 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); $42BHigh Grade; $60B Mezz.; $20B in CMBS CDOs. Underlying consists mostly ofRMBS 2005 vintage across ratings. Material net notionals of $305B inmortgage and corporate exposures combined. Investment Grade Corp.arbitrage another $55B; $1.5trillion of exposure to European banks throughbalance sheet CDOs.

IR derivatives: USD/EUR/Yen denominated. $3B-$4B in size. Very littlenegative convexity; long long-dated volatility, short short-datedvolatility; Long american exercise, short european exercise.

FX: they have prime brokerage of $30B in volumes and they clear throughCLS.

International Leasing Corp; commercial aircraft leasing to over 140airlines 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 mischaracterizedsomething, let us know.

Regards,

Alex

BOG-- FOIA 10-251 --000054

From: William B EnglishTo: Brian F MadiganCc: James A Clouse; Roberto Perli; William B English; William R NelsonSubject: Background on AIGDate: 09/13/2008 02:24 AMAttachments: AIG background.pdf

Brian-

Attached is the promised memo. I found very little on the derivatives activities ofAIG, which is frustrating. They don't seem to say much in the 10-Ks/10-Qs. I willcheck again in the am.

Thanks,Bill E.

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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, December 31,2008 2007

Assets:Investments and Financial Services assets:

Fixed maturity securities:

Bonds available for sale, at fair value (amortized cost: 2008 – $400,052; 2007 –

$393,170) $ 393,316 $ 397,372

Bonds held to maturity, at amortized cost (fair value: 2008 – $21,809; 2007 – $22,157) 21,632 21,581

Bond trading securities, at fair value 8,801 9,982

Equity securities:

Common stocks available for sale, at fair value (cost: 2008 – $13,490; 2007 – $12,588) 17,306 17,900

Common and preferred stocks trading, at fair value 22,514 21,376

Preferred stocks available for sale, at fair value (cost: 2008 – $2,596; 2007 – $2,600) 2,496 2,370

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) 34,384 33,727

Financial Services assets:

Flight equipment primarily under operating leases, net of accumulated depreciation

(2008 – $11,359; 2007 – $10,499) 43,887 41,984

Securities available for sale, at fair value (cost: 2008 – $1,246; 2007 – $40,157) 1,205 40,305

Trading securities, at fair value 35,170 4,197

Spot commodities, at fair value 90 238

Unrealized gain on swaps, options and forward transactions, at fair value 11,548 12,318

Trade receivables 2,294 672

Securities purchased under agreements to resell, at fair value in 2008 16,597 20,950

Finance receivables, net of allowance (2008 – $1,133; 2007 – $878) (held for sale:

2008 – $36; 2007 – $233) 33,311 31,234

Securities lending invested collateral, at fair value (cost: 2008 – $67,758; 2007 – $80,641) 59,530 75,662

Other invested assets (amount measured at fair value: 2008 – $22,099; 2007 – $20,827) 62,029 58,823

Short-term investments (amount measured at fair value: 2008 – $24,167) 69,492 51,351

Total Investments and Financial Services assets 835,602 842,042

Cash 2,229 2,284

Investment income due and accrued 6,614 6,587

Premiums and insurance balances receivable, net of allowance (2008 – $596; 2007 – $662) 20,050 18,395

Reinsurance assets, net of allowance (2008 – $502; 2007 – $520) 22,940 23,103

Current and deferred income taxes 8,211 —

Deferred policy acquisition costs 46,733 43,914

Investments in partially owned companies 628 654

Real estate and other fixed assets, net of accumulated depreciation (2008 – $5,710; 2007 –

$5,446) 5,692 5,518

Separate and variable accounts, at fair value 73,401 78,684

Goodwill 10,661 9,414

Other assets (amount measured at fair value: 2008 – $2,452; 2007 – $4,152) 17,115 17,766

Total assets $1,049,876 $1,048,361

See Accompanying Notes to Consolidated Financial Statements.

1 BOG-- FOIA 10-251 --000059


CONSOLIDATED BALANCE SHEET (continued)

(in millions, except share data) (unaudited)


Liabilities:Reserve for losses and loss expenses $ 88,747 $ 85,500

Unearned premiums 28,738 27,703

Future policy benefits for life and accident and health insurance contracts 147,232 136,387

Policyholders’ contract deposits (amount measured at fair value: 2008 – $4,179; 2007 – $295) 265,411 258,459

Other policyholders’ funds 13,773 12,599

Commissions, expenses and taxes payable 5,597 6,310

Insurance balances payable 5,569 4,878

Funds held by companies under reinsurance treaties 2,498 2,501

Current income taxes payable — 3,823

Financial Services liabilities:

Securities sold under agreements to repurchase (amount measured at fair value: 2008 –

$8,338) 9,659 8,331

Trade payables 1,622 6,445

Securities and spot commodities sold but not yet purchased, at fair value 3,189 4,709

Unrealized loss on swaps, options and forward transactions, at fair value 24,232 14,817

Trust deposits and deposits due to banks and other depositors (amount measured at fair

value: 2008 – $240) 6,165 4,903

Commercial paper and extendible commercial notes 15,061 13,114

Long-term borrowings (amount measured at fair value: 2008 – $53,839) 163,577 162,935

Separate and variable accounts 73,401 78,684

Securities lending payable 75,056 81,965

Minority interest 11,149 10,422

Other liabilities (amount measured at fair value: 2008 – $6,861; 2007 – $3,262) 31,012 27,975

Total liabilities 971,688 952,460

Preferred shareholders’ equity in subsidiary companies 100 100

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 7,370 6,878

Additional paid-in capital 9,446 2,848

Payments advanced to purchase shares — (912)

Retained earnings 73,743 89,029

Accumulated other comprehensive income (loss) (3,903) 4,643

Treasury stock, at cost; 2008 – 259,225,244; 2007 – 221,743,421 shares of common stock (8,568) (6,685)

Total shareholders’ equity 78,088 95,801

Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity $1,049,876 $1,048,361


2 BOG-- FOIA 10-251 --000060


CONSOLIDATED STATEMENT OF INCOME (LOSS)

(in millions, except per share data) (unaudited)

Three Months Six MonthsEnded June 30, Ended June 30,2008 2007 2008 2007

Revenues:Premiums and other considerations $21,735 $19,533 $ 42,407 $39,175

Net investment income 6,728 7,853 11,682 14,977

Net realized capital losses (6,081) (28) (12,170) (98)

Unrealized market valuation losses on AIGFP super senior credit default swap

portfolio (5,565) — (14,672) —

Other income 3,116 3,792 6,717 7,741

Total revenues 19,933 31,150 33,964 61,795

Benefits and expenses:Incurred policy losses and benefits 18,450 16,221 34,332 32,367

Insurance acquisition and other operating expenses 10,239 8,601 19,652 16,928

Total benefits and expenses 28,689 24,822 53,984 49,295

Income (loss) before income taxes (benefits) and minority interest (8,756) 6,328 (20,020) 12,500

Income taxes (benefits) (3,357) 1,679 (6,894) 3,405

Income (loss) before minority interest (5,399) 4,649 (13,126) 9,095

Minority interest 42 (372) (36) (688)

Net income (loss) $ (5,357) $ 4,277 $(13,162) $ 8,407

Earnings (loss) per common share:Basic $ (2.06) $ 1.64 $ (5.11) $ 3.22

Diluted $ (2.06) $ 1.64 $ (5.11) $ 3.21

Dividends declared per common share $ 0.220 $ 0.200 $ 0.420 $ 0.365

Average shares outstanding:Basic 2,605 2,602 2,575 2,607

Diluted 2,605 2,613 2,575 2,621


3 BOG-- FOIA 10-251 --000061

From: Brian F MadiganTo: William B EnglishSubject: Re: Background on AIGDate: 09/13/2008 05:24 AM

Thanks, Bill. Could you send me the Word document?

Brian

▼ William B English/BOARD/FRS


09/13/2008 02:24 AM

To Brian F Madigan/BOARD/FRS@BOARD

cc James A Clouse/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD

Subject Background on AIG

Duplicate

BOG-- FOIA 10-251 --000062

From: Brian F MadiganTo: Scott Alvarez; Deborah P BaileySubject: AIGDate: 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 othersupervisors (U.S. or foreign) about the current issues regarding the firm?

Brian

BOG-- FOIA 10-251 --000063

From: [email protected]: Brian MadiganSubject: Fw: Update on AIGDate: 09/13/2008 07:42 AM

Brian,

Below is the quick note I drafted for Bill. Tim and others about themeeting last night.

Regards,

AlexSent from my BlackBerry Handheld

Duplicate

BOG-- FOIA 10-251 --000064

From: Brian F MadiganTo: Scott Alvarez; Deborah P Bailey; James A Clouse; William B English; Michael S Gibson; William R Nelson;

Roberto Perli; Patrick M ParkinsonCc: Brian F MadiganSubject: Fw: Update on AIGDate: 09/13/2008 07:57 AM

----- Forwarded by Brian F Madigan/BOARD/FRS on 09/13/2008 07:52 AM -----

[email protected]

09/13/2008 07:42 AM

To "Brian Madigan" <[email protected]>

cc

Subject Fw: Update on AIG

Brian,

Below is the quick note I drafted for Bill. Tim and others about themeeting last night.

Regards,


Duplicate

BOG-- FOIA 10-251 --000065

From: Alejandro LaTorreTo: Scott AlvarezCc: Brian Peters; Dianne Dobbeck; Millie MartinezSubject: Re: Material - As per Alex LaTorreDate: 09/13/2008 08:04 AM

Scott;

I have Jacob's information

email: [email protected]: 212-770-8860Cell:

Regards,

Alex

▼ Scott Alvarez/BOARD/FRS@BOARD

ScottAlvarez/BOARD/FRS@BOARD

09/13/2008 07:59 AM

To Millie Martinez/NY/FRS@FRS

cc Alejandro LaTorre/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, DianneDobbeck/NY/FRS@FRS

Subject Re: Material - As per Alex LaTorre

Millie, Thanks. Can we also get the contact information? It would be goodto 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

MillieMartinez/NY/FRS@FRS

09/12/2008 10:56 PM

To Scott Alvarez/BOARD/FRS@BOARD

cc Alejandro LaTorre/NY/FRS@FRS, DianneDobbeck/NY/FRS@FRS, Brian Peters/NY/FRS@FRS

Subject Material - As per Alex LaTorre

(b) (6)

BOG-- FOIA 10-251 --000066

[attachment "DOC20080912224308.pdf" deleted by AlejandroLaTorre/NY/FRS] [attachment "DOC20080912224106.pdf" deleted byAlejandro 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 AlejandroLaTorre/NY/FRS] [attachment "DOC20080912224232.pdf" deleted byAlejandro LaTorre/NY/FRS]

BOG-- FOIA 10-251 --000067

From: Brian F MadiganTo:Subject: AIGDate: 09/13/2008 08:07 AM

Mr. Chairman,

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

Brian

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BOG-- FOIA 10-251 --000068

From: Patrick M ParkinsonTo: Brian F Madigan; Deborah BaileySubject: Re: Update on AIGDate: 09/13/2008 08:11 AM

Obvious question is what major bank counterparties think their exposures are. Givenmarket 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


[email protected]

09/13/2008 07:42 AM

To "Brian Madigan" <[email protected]>

cc

Subject Fw: Update on AIG

Brian,

Below is the quick note I drafted for Bill. Tim and others aboutthemeeting last night.

Regards,


Duplicate

BOG-- FOIA 10-251 --000069

From: Deborah P BaileyTo: Patrick M Parkinson; Brian F MadiganSubject: Re: Update on AIGDate: 09/13/2008 08:37 AM

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

----- Original Message -----From: Patrick.M.ParkinsonSent: 09/13/2008 08:11 AM ASTTo: Brian Madigan; Deborah BaileySubject: Re: Update on AIG

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

Duplicate

BOG-- FOIA 10-251 --000070

From: Scott AlvarezTo:Subject: Re: Conf call at 10 amDate: 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▼

----- Original Message ----- 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 meknow if you need number.

Scott, --------------------------Sent from my BlackBerry Wireless Handheld

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BOG-- FOIA 10-251 --000071

From: Donald L KohnTo: Timothy Geithner; Kevin WarshCc:Subject: AIGDate: 09/13/2008 10:00 AM

Staff has been in contact with AIG (Jacob) this morning. AIG sees this as a liquidityevent and has investment bankers looking at assets this weekend but will not sell offcore assets and is not seeking a major equity injection or strategic partner. theyface the possibility of a multi-grade downgrade ffrom Moody's on Monday, whichwould probably be the death knell. They were vague as to what they expected fromus except that it sounded like an open ended liquidity facility.

AIG will get back to us later this morning with a morespecific request for us and a more specific plan for raising cash and capital. they aretalking to the insurance commisioners at 10.

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BOG-- FOIA 10-251 --000072

From: Donald L KohnTo: Scott Alvarez; Brian Madigan; Deborah BaileySubject: Fw: AIGDate: 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 Cc: Subj

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Duplicate

BOG-- FOIA 10-251 --000073

From: Brian F MadiganTo: Scott AlvarezCc: Donald L KohnSubject: AIGDate: 09/13/2008 10:10 AM

Scott,

Jacob Frenkel just called. He will call back to my office with someone namedWilliamson at 11:00 a.m. to discuss their efforts to sell assets. Is that time OK withyou?

Brian

BOG-- FOIA 10-251 --000074

From: Scott AlvarezTo: Brian F MadiganSubject: Re: AIGDate: 09/13/2008 10:11 AM

Yes. I'll come to your office. Scott

▼ Brian F Madigan/BOARD/FRS


09/13/2008 10:10 AM


cc Donald L Kohn/BOARD/FRS@BOARD

Subject AIG

Duplicate

BOG-- FOIA 10-251 --000075

Calendar Entry

MeetingNotify me

Mark Private Pencil In

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

When

Starts Sat 09/13/2008 02:00 PM

Ends Sat 09/13/2008 03:00 PM1 hour

Specify a different time zone

Invitees

Invited The following invitees have been invited

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

Chair Carol Grunwald/NY/FRS

Where

Location

ReservedThe following have beenrequested

RoomsM9 MKT Central Meeting Room 1/NY Main Building@FRS

Categorize

Description

Your Notes

BOG-- FOIA 10-251 --000076

From: Patricia MosserTo: Brian F MadiganSubject: AIG call nowDate: 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: Donald L KohnCc: Kevin Warsh; Timothy GeithnerSubject: Re: AIGDate: 09/13/2008 11:13 AM

▼ Donald L Kohn/BOARD/FRS

Donald LKohn/BOARD/FRS

09/13/2008 10:00 AM

To Timothy Geithner/NY/FRS@FRS, KevinWarsh/BOARD/FRS@BOARD

cc

Subject AIG

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Duplicate

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BOG-- FOIA 10-251 --000078

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

[email protected]: 703-304-6276blackberry: 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 / AccessCode: 9494579# / Participation Code: 6133#

When

Starts Sat 09/13/2008 02:00 PM

1 hour

Ends Sat 09/13/2008 03:00 PM

Invitees

Invited The following invitees have been invited

Required(to)

Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Brian FMadigan/BOARD/FRS@BOARD,Christopher Calabia/NY/FRS@FRS,Deborah PBailey/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, JamieMcAndrews/NY/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD,Michael SGibson/BOARD/FRS@BOARD, MichaelSchetzel/NY/FRS@FRS, PatriciaMosser/NY/FRS@FRS, Scott

Chair

Carol Grunwald/NY/FRS

Where

Location

Reserved The following have beenrequested

Rooms M9 MKT Central MeetingRoom 1/NY MainBuilding@FRS

MeetingPassword

Categorize

BOG-- FOIA 10-251 --000079

Alvarez/BOARD/FRS@BOARD, TobiasAdrian/NY/FRS@FRS, WilliamDudley/NY/FRS@FRS

Description

YourNotes

BOG-- FOIA 10-251 --000080

▼ Coryann Stefansson/BOARD/FRS@BOARD

CoryannStefansson/BOARD/FRS@BOARD

09/13/2008 11:17 AM

To Suzanna Costello/ATL/FRS@FRS, JamesBarnes/RICH/FRS@FRS, Steven MDurfey/BSR/CHI/FRS@FRS,[email protected],[email protected], SuzanneKillian/BOARD/FRS@BOARD, Phyllis LHarwell/BOARD/FRS@BOARD, WilliamCharwat/BOARD/FRS, ChrisHaley/BOS/FRS@FRS, KimJensik/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS, Jerrold LNewlon/CLEV - BSR12/CLEV/FRS@FRS

cc

Subject Lehman, Wamu and AIG Restricted

Hi All

Not Responsive

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 ifthings get bad this issue could devolve quickly. Here too you need to get a sense ofexposure/risk to AIG.

I am in the office if you need me

Coryann S. StefanssonAssociate Director Bank Supervision and RegulationBoard of GovernorsOffice 202-452-5287Cell Number 202- 294- 9829

Assistant - Ms. Kimberly [email protected] Number 202 736-5555

Not Responsive

BOG-- FOIA 10-251 --000082

From: Donald L KohnTo:Subject: Re: AIGDate: 09/13/2008 11:36 AM

▼

09/13/2008 11:14 AM

To Donald L Kohn/BOARD/FRS@BOARD

cc Kevin Warsh/BOARD/FRS@BOARD, TimothyGeithner/NY/FRS@FRS

Subject Re: AIG

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Duplicate

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BOG-- FOIA 10-251 --000083

From:To: Donald L KohnSubject: Re: AIGDate: 09/13/2008 11:38 AM

Thanks.▼ Donald L Kohn/BOARD/FRS


09/13/2008 11:36 AM

To

cc

Subject Re: AIG

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Duplicate

BOG-- FOIA 10-251 --000084

From: [email protected]: [email protected]; [email protected]; [email protected]: aigDate: 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 andhopefully reduce overlap?

Thanks,Mike202-452-2495

BOG-- FOIA 10-251 --000085

From: William B EnglishTo: Michael S GibsonSubject: memoDate: 09/13/2008 12:25 PMAttachments: AIG memo.doc

Here is what I have. Derivatives are on p. 3. Comments on anything are verywelcome.

Thanks,Bill E.

BOG-- FOIA 10-251 --000086

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BOG-- FOIA 10-251 --000087

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BOG-- FOIA 10-251 --000088

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BOG-- FOIA 10-251 --000089

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BOG-- FOIA 10-251 --000090

From: Tobias AdrianTo: Michael S GibsonCc: Adam Ashcraft; Christopher Calabia; Michael S GibsonSubject: Re: aigDate: 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, bothfundamental 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

-------------------------------------------------------------------Tobias AdrianFederal Reserve Bank of New YorkCapital Markets ResearchTel: (212) 720-1717http://nyfedeconomists.org/adrian/------------------------------------------------------------------

The views in this message are those of the sender and not necessarily those of theFederal Reserve Bank of New York or the Federal Reserve System.▼ Michael S Gibson/Board/FRS@BOARD

Michael SGibson/Board/FRS@BOARD Sent by: Michael SGibson/BOARD/FRS@BOARD

09/13/2008 11:54 AM

To Christopher Calabia/NY/FRS@FRS, TobiasAdrian/NY/FRS@FRS, AdamAshcraft/NY/FRS@FRS

cc

Subject aig

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Duplicate

BOG-- FOIA 10-251 --000091

From: Adam AshcraftTo: Alejandro LaTorre; Warren HrungCc: Tobias Adrian; Michael S GibsonSubject: AIG solvencyDate: 09/13/2008 12:27 PM

ABA

Adam B. AshcraftFinancial Intermediation FunctionFederal Reserve Bank of New York

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BOG-- FOIA 10-251 --000092

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

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

(b) (6)

BOG-- FOIA 10-251 --000093

From: Adam AshcraftTo: Tobias AdrianCc: Christopher Calabia; Michael S GibsonSubject: Re: aigDate: 09/13/2008 12:27 PM

Tobais

I circled around with Alex and am working on the solvency question. It looks likeMarkets has the collateral issue in control

ABA

Adam B. AshcraftFinancial Intermediation FunctionFederal Reserve Bank of New York(212) 720-1617 phone(212) 720-8363 fax


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BOG-- FOIA 10-251 --000094

From: Tobias AdrianTo: Adam AshcraftCc: Christopher Calabia; Michael S GibsonSubject: Re: aigDate: 09/13/2008 12:29 PM

ok-------------------------------------------------------------------Tobias AdrianFederal Reserve Bank of New YorkCapital Markets ResearchTel: (212) 720-1717http://nyfedeconomists.org/adrian/------------------------------------------------------------------

The views in this message are those of the sender and not necessarily those of theFederal Reserve Bank of New York or the Federal Reserve System.▼ Adam Ashcraft/NY/FRS

AdamAshcraft/NY/FRS

09/13/2008 12:31 PM

To Tobias Adrian/NY/FRS@FRS

cc Christopher Calabia/NY/FRS@FRS, Michael SGibson/Board/FRS@BOARD

Subject Re: aig

Duplicate

BOG-- FOIA 10-251 --000095

From: Patricia MosserTo: Alejandro LaTorre; Richard Charlton; Tobias Adrian; [email protected]; Catherine Voigts; Adam

Ashcraft; Michael Schetzel; Terrence Checki; William Rutledge; Brian Peters; [email protected];Meg McConnell; Warren Hrung; Hayley Boesky; Chris Burke; Richard Dzina; William Walsh

Cc: Brian F Madigan; Scott AlvarezSubject: AIG/Board callDate: 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 AlvarezFRBNY: Trish Mosser, Rich Charlton

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

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

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BOG-- FOIA 10-251 --000096

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

BOG-- FOIA 10-251 --000097

From: [email protected]: [email protected]: [email protected]; [email protected]; [email protected]: Re: AIG solvencyDate: 09/13/2008 12:57 PM

Adam,

Mike

AdamAshcraft/NY/FRS@FRS ToAlejandro LaTorre/NY/FRS@FRS,09/13/2008 12:27 Warren Hrung/NY/FRS@FRSPM cc

Tobias Adrian/NY/FRS@FRS, Michael SGibson/BOARD/FRS@BOARDSubjectAIG solvency

Duplicate

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BOG-- FOIA 10-251 --000098

From: Brandon HallTo: BSR LFICSubject: LFI Exposures to AIG (9/13/08 AM Update)Date: 09/13/2008 01:00 PMAttachments: 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 informationavailable, culled from the sources at hand (i.e. not reaching out directly to the firms). Using flow-basis traffic, we will work to updatethis information over the course of today and going forward.

____________________________________Brandon J. HallCounterparty Credit Risk Monitoring & AnalysisFederal Reserve Bank of New York33 Liberty St. | New York, NY 10045

P: 212-720-1349F: 212-720-1468E: [email protected]

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

BOG-- FOIA 10-251 --000099

BOG-- FOIA 10-251 --000100

From: Jon D GreenleeTo: Michael S Gibson; Christopher CalabiaSubject: Rough cut at a liquidity sectionDate: 09/13/2008 01:01 PMAttachments: AIG Funding and Liquidity Needs.doc


BOG-- FOIA 10-251 --000101

(b) (5)

BOG-- FOIA 10-251 --000102

From: Warren HrungTo: Adam AshcraftCc: Alejandro LaTorre; Michael S Gibson; Tobias AdrianSubject: Re: AIG solvencyDate: 09/13/2008 01:01 PM

Very quick and dirty.

Warren B. HrungAnalytical DevelopmentMarkets Group Federal Reserve Bank of New York(212) 720 - 6054▼ Adam Ashcraft/NY/FRS

AdamAshcraft/NY/FRS

09/13/2008 12:30 PM

To Alejandro LaTorre/NY/FRS@FRS, WarrenHrung/NY/FRS@FRS

cc Tobias Adrian/NY/FRS@FRS, Michael SGibson/BOARD/FRS@BOARD

Subject AIG solvency

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000103

From: Adam AshcraftTo: Michael S GibsonCc: Alejandro LaTorre; Tobias Adrian; Warren HrungSubject: Re: AIG solvencyDate: 09/13/2008 01:03 PM

Mike

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,

▼ Adam Ashcraft/NY/FRS@FRS

AdamAshcraft/NY/FRS@FRS

09/13/2008 12:27 PM

To Alejandro LaTorre/NY/FRS@FRS, WarrenHrung/NY/FRS@FRS

cc Tobias Adrian/NY/FRS@FRS, Michael SGibson/BOARD/FRS@BOARD

Subject AIG solvency

(b) (5)

Duplicate

Duplicate

BOG-- FOIA 10-251 --000104

From: Coryann StefanssonTo: 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 WalkerSubject: Fw: LFI Exposures to AIG (9/13/08 AM Update)Date: 09/13/2008 01:07 PMAttachments: LFI Key Credit Exposures to AIG 091308.xls



----- Forwarded by Coryann Stefansson/BOARD/FRS on 09/13/2008 01:06 PM -----

Brandon Hall/NY/FRS@FRS

09/13/2008 01:00 PM

To BSR LFIC

cc

Subject LFI Exposures to AIG (9/13/08 AM Update)

Duplicate

BOG-- FOIA 10-251 --000105

From: Brian F MadiganTo: James A Clouse; William B English; William R Nelson; Roberto Perli; Michael S Gibson; Deborah P Bailey; Jon D

GreenleeCc: Brian F MadiganSubject: Fw: AIG/Board callDate: 09/13/2008 01:10 PM



09/13/2008 12:51 PM

To Alejandro LaTorre/NY/FRS@FRS@NY, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,[email protected], CatherineVoigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS,Michael Schetzel/NY/FRS, Terrence Checki/NY/FRS,William Rutledge/NY/FRS@FRS@NY, BrianPeters/NY/FRS, [email protected], MegMcConnell/NY/FRS@FRS, Warren Hrung/NY/FRS,Hayley Boesky/NY/FRS, Chris Burke/NY/FRS, RichardDzina/NY/FRS, William Walsh/NY/FRS

cc Brian F Madigan/BOARD/FRS@BOARD, ScottAlvarez/BOARD/FRS@BOARD

Subject AIG/Board call

Duplicate

BOG-- FOIA 10-251 --000106

Meeting Update Request:Calendar EntrySubject: Update on AIG Solvency / 1-888-808-6929 / Access Code: 9494579# / Participation Code: 6133#When Date: Saturday 09/13/2008Time: 02:00 PM - 03:00 PM (1 hour)Chair: Carol GrunwaldInvitees Required (to): 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; JimMahoney/NY/FRS@FRS; Jon D Greenlee/BOARD/FRS@BOARD; Michael S Gibson/BOARD/FRS@BOARD; MichaelSchetzel/NY/FRS@FRS; Patricia Mosser/NY/FRS@FRS; Scott Alvarez/BOARD/FRS@BOARD; SusanStiehm/NY/FRS@FRS; Terrence Checki/NY/FRS@FRS; Tobias Adrian/NY/FRS@FRS; WilliamDudley/NY/FRS@FRS

Optional (cc):Where Location: Operations Room

Room changed to the Operations Room, 9th floor.

BOG-- FOIA 10-251 --000107

From: Michael S GibsonTo: Jon D Greenlee; William B English; William R Nelson; Christopher Calabia; Adam Ashcraft; Alejandro LaTorre;

Roberto Perli; James A ClouseSubject: derivativesDate: 09/13/2008 01:57 PMAttachments: aig-derivatives.doc

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

Mike

BOG-- FOIA 10-251 --000108

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BOG-- FOIA 10-251 --000109

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BOG-- FOIA 10-251 --000110

From: Tobias AdrianTo: Michael S Gibson; Adam AshcraftCc: Alejandro LaTorre; Warren HrungSubject: Re: AIG solvencyDate: 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


----- 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: Scott AlvarezTo: Donald KohnSubject: Fw: Material - As per Alex LaTorreDate: 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: [email protected]: 212-770-8860Cell:

Regards,

Alex

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Duplicate

BOG-- FOIA 10-251 --000112

From: Coryann StefanssonTo: Gregory H FeldbergSubject: Re: MONDAY IMPORTANT....Date: 09/13/2008 02:34 PM

Yep...its pretty badCoryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # 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 FeldbergOffice: (202) 452-2598Cellphone: (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; LauraMacedo; Gregory Feldberg; Cheryl Taylor; Nancy Berlad; KwayneJennings; Nancy Oakes; Tim Clark; David Gibson; MatthewCanzater; Christine Schwaninger; Genevievette Walker Subject: MONDAY IMPORTANT....Hey ALL

I need everyone in the office on Monday morning ...Sorry to do this toyou but unless you are out of state I need you here. There aresignificant issues at Lehman and Aig....I will arrange a call with you onSunday nite at 7 pm.......I will send an email appt for Sunday nite....Weneed to be monitoring and analyzing our firms etc and implicationsfrom market events.....

I am sending an appt to you shortly .....



BOG-- FOIA 10-251 --000113

From: Coryann StefanssonTo: James BarnesSubject: Re: Lehman, Wamu and AIG RestrictedDate: 09/13/2008 02:35 PM

Sorry.....need to get an understanding of lehman bros exposures at the firm andaig......without going to the firm.....anychance u all have reports lying aroundCoryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # 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

CoryI am unable to open this message on my blackberry because of theencryption. 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; RonFeldman; Nadine Wallman; Suzanne Killian; Phyllis Harwell;William Charwat; Chris Haley; Kim Jensik; Jon Greenlee; JerroldNewlon Subject: Lehman, Wamu and AIG Restricted

[This message was encrypted by the sender]

BOG-- FOIA 10-251 --000114

From: Jon D GreenleeTo: James EmbersitSubject: Re: Urgent conference callDate: 09/13/2008 02:48 PM

Don't worry, we can talked in the morning. we've been dealing with a likely liquidity crisis at AIG

early next week.

.

Just wanted to talk about steps on Monday and to get everyone prepared.

Jon

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ James Embersit/BOARD/FRS

JamesEmbersit/BOARD/FRS

09/13/2008 02:45 PM

To Jon D Greenlee/BOARD/FRS@BOARD

cc

Subject 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 Embersitoffice - 202-452-5249cell-202-528-7884-Jim Embersit202-452-5249-------------------------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?

Not Responsive

Not Responsive

(b) (5)

BOG-- FOIA 10-251 --000115

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Sabeth I Siddique/BOARD/FRS

Sabeth ISiddique/BOARD/FRS

09/13/2008 01:51 PM


cc

Subject Re: Urgent conference call

--------------------------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; NinaNichols Subject: Urgent conference call

We need to talk about the developments in the marketplace and possible nextsteps. 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


(b) (5)

BOG-- FOIA 10-251 --000116

From: Donald L KohnTo: [email protected]: [email protected]: Re: Fw: Material - As per Alex LaTorreDate: 09/13/2008 02:52 PM

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

BOG-- FOIA 10-251 --000117

From: James EmbersitTo: Jon D GreenleeSubject: Re: Urgent conference callDate: 09/13/2008 02:54 PM

GreatWill be fully prepared for tomorrows call

Jim Embersitoffice - 202-452-5249cell-202-528-7884-Jim Embersit202-452-5249-------------------------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: Jon D GreenleeTo: Christopher Calabia; William R Nelson; William B English; James A Clouse; Alejandro LaTorre; Brian F Madigan;

Deborah P BaileySubject: AIG's Ins CompaniesDate: 09/13/2008 03:04 PM

Reading the AM Best stuff more closely, all the insurance subs were downgraded inJune 2008 and the outlook was flagged as "negative".


BOG-- FOIA 10-251 --000119

From: Roger ColeTo: Deborah P BaileySubject: Re: AIG/Board callDate: 09/13/2008 03:05 PM

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

BOG-- FOIA 10-251 --000120

From: Donald L KohnTo: Randall S KrosznerSubject: several itemsDate: 09/13/2008 03:19 PM

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

2. According to Ben,

3.

Don

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

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000121

From: Jon D GreenleeTo: William B EnglishSubject: Re: AIG's Ins CompaniesDate: 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 GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ William B English/BOARD/FRS


09/13/2008 03:26 PM


cc

Subject Re: AIG's Ins Companies

Downgraded to what and why? Moody's downgraded a bunch of AIG subs becausethey had guarantees from the holding company and the holding company gotdowngraded.

--Bill E.

▼ Jon D Greenlee/BOARD/FRS

Duplicate

BOG-- FOIA 10-251 --000122

Associate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962

BOG-- FOIA 10-251 --000123

Meeting Invitation:Calendar EntrySubject: AIG UpdateWhen Date: Saturday 09/13/2008Time: 04:00 PM - 05:00 PM (1 hour)Chair: Kristin MayerInvitees Required (to): 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; HelenMucciolo/NY/FRS@FRS; Jamie McAndrews/NY/FRS@FRS; Jeanmarie Davis/NY/FRS@FRS; JimMahoney/NY/FRS@FRS; Joyce Hansen/NY/FRS@FRS; Lawrence Radecki/NY/FRS@FRS; Lucinda MBrickler/NY/FRS@FRS; Meg McConnell/NY/FRS@FRS; Michael Schetzel/NY/FRS@FRS; PatriciaMosser/NY/FRS@FRS; Patrick M Parkinson/BOARD/FRS@BOARD; Richard Charlton/NY/FRS@FRS; RichardDzina/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; TheodoreLubke/NY/FRS@FRS; Thomas Baxter/NY/FRS@FRS; Til Schuermann/NY/FRS@FRS; TimothyGeithner/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; WilliamWalsh/NY/FRS@FRS

Optional (cc): Alexandra Merle-Huet/NY/FRS@FRS; Bettyann Griffith/NY/FRS@FRS; Daniel Boulos/NY/FRS@FRS; MarleneWilliams/NY/FRS@FRS; Michael Held/NY/FRS@FRS; Michael Silva/NY/FRS@FRS; Tanshel Pointer/NY/FRS@FRS

Where Location: Board Room

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

BOG-- FOIA 10-251 --000124

From: Donald L KohnTo: Kevin WarshSubject: AIGDate: 09/13/2008 03:42 PM

please call re my call with Frenkel and Willumsted

BOG-- FOIA 10-251 --000125

Meeting Update Request:Calendar EntrySubject: AIG UpdateWhen Date: Saturday 09/13/2008Time: 04:00 PM - 05:00 PM (1 hour)Chair: Kristin MayerInvitees Required (to): 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; HelenMucciolo/NY/FRS@FRS; Jamie McAndrews/NY/FRS@FRS; Jeanmarie Davis/NY/FRS@FRS; JimMahoney/NY/FRS@FRS; Joyce Hansen/NY/FRS@FRS; Lawrence Radecki/NY/FRS@FRS; Lucinda MBrickler/NY/FRS@FRS; Meg McConnell/NY/FRS@FRS; Michael Schetzel/NY/FRS@FRS; PatriciaMosser/NY/FRS@FRS; Patrick M Parkinson/BOARD/FRS@BOARD; Richard Charlton/NY/FRS@FRS; RichardDzina/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; TheodoreLubke/NY/FRS@FRS; Thomas Baxter/NY/FRS@FRS; Til Schuermann/NY/FRS@FRS; TimothyGeithner/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; WilliamWalsh/NY/FRS@FRS

Optional (cc): Alexandra Merle-Huet/NY/FRS@FRS; Bettyann Griffith/NY/FRS@FRS; Daniel Boulos/NY/FRS@FRS; MarleneWilliams/NY/FRS@FRS; Michael Held/NY/FRS@FRS; Michael Silva/NY/FRS@FRS; Tanshel Pointer/NY/FRS@FRS

Where Location: Board Room

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

Dial-in Info:

Number: 888-557-8511Access Code: 8785192

BOG-- FOIA 10-251 --000126

From: Donald L KohnTo: Timothy Geithner; Kevin WarshCc: Scott Alvarez; [email protected]: AIGDate: 09/13/2008 03:54 PM

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

(b) (6)

(b) (5)

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From:To: Donald L KohnCc: [email protected]; Kevin Warsh; Scott Alvarez; Timothy GeithnerSubject: Re: AIGDate: 09/13/2008 03:57 PM

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


09/13/2008 03:54 PM

To TimothyGeithner/NY/FRS@FRS, KevinWarsh/BOARD/FRS@BOARD

cc Scott Alvarez/BOARD/FRS@BOARD,[email protected]

Subject AIG

(b) (6)

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000128

From: Tobias AdrianTo: Michael S Gibson; Adam Ashcraft; Christopher CalabiaCc: Joshua RosenbergSubject: AIG Financial System Risk Evaluation.docDate: 09/13/2008 04:00 PMAttachments: 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


The views in this message are those of the sender and not necessarily those of theFederal Reserve Bank of New York or the Federal Reserve System.

- AIG Financial System Risk Evaluation.doc

BOG-- FOIA 10-251 --000129

1

(b) (5)

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2

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3

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From: Scott AlvarezTo: Donald L KohnCc: [email protected] Kevin Warsh; Timothy GeithnerSubject: Re: AIGDate: 09/13/2008 04:04 PM

Scott

▼ Donald L Kohn/BOARD/FRS


09/13/2008 03:54 PM

To TimothyGeithner/NY/FRS@FRS, KevinWarsh/BOARD/FRS@BOARD

cc Scott Alvarez/BOARD/FRS@BOARD,[email protected]

Subject AIG

(b) (6)

(b) (6)

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000135

From: William R NelsonTo: Roberto PerliSubject: consequencesDate: 09/13/2008 04:27 PM


(b) (5)

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From: William R NelsonTo: William B English; James A ClouseSubject: what is this, a joke?Date: 09/13/2008 04:29 PM


(b) (5)

BOG-- FOIA 10-251 --000137

From: James A ClouseTo: William R NelsonCc: William B EnglishSubject: Re: what is this, a joke?Date: 09/13/2008 04:34 PM

Only for someone with a very dark sense of humor!

[email protected]: 703-304-6276blackberry: 202-390-3521▼ William R Nelson/BOARD/FRS

William RNelson/BOARD/FRS

09/13/2008 04:29 PM

To William B English/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD

cc

Subject what is this, a joke?

Duplicate

BOG-- FOIA 10-251 --000138

From: William R NelsonTo: Brian F MadiganSubject: a key questionDate: 09/13/2008 05:08 PM


(b) (5)

BOG-- FOIA 10-251 --000139

From: William B EnglishTo: Brian F Madigan; James A Clouse; William R Nelson; Roberto Perli; Antoinette Gibson; Jon D Greenlee; William

B EnglishSubject: Partial memo draftDate: 09/13/2008 05:27 PMAttachments: AIG memo v2.doc

Binder1.pdf

Attached is a rough draft of the first part of our memo. I was not sure where tostop, so I put in some discussion of the current problems (which may overlap withJon'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 oflending).

Comments very welcome,Bill E.

(b) (5)

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$393,170) $ 393,316 $ 397,372



Equity securities:








(2008 – $11,359; 2007 – $10,499) 43,887 41,984








2008 – $36; 2007 – $233) 33,311 31,234





Cash 2,229 2,284








$5,446) 5,692 5,518


Goodwill 10,661 9,414


Total assets $1,049,876 $1,048,361


1 BOG-- FOIA 10-251 --000147
















$8,338) 9,659 8,331





value: 2008 – $240) 6,165 4,903











2,948,038,001; 2007 – 2,751,327,476 7,370 6,878









2 BOG-- FOIA 10-251 --000148









portfolio (5,565) — (14,672) —

Other income 3,116 3,792 6,717 7,741

Total revenues 19,933 31,150 33,964 61,795








Net income (loss) $ (5,357) $ 4,277 $(13,162) $ 8,407


Diluted $ (2.06) $ 1.64 $ (5.11) $ 3.21



Diluted 2,605 2,613 2,575 2,621


3 BOG-- FOIA 10-251 --000149


Segment Results

The following table summarizes the operations of each principal segment: (See also Note 2 to Consolidated FinancialStatements.)

Three Months Ended Six Months EndedPercentage PercentageJune 30, June 30,Operating Segments Increase/ Increase/

(in millions) 2008 2007 (Decrease) 2008 2007 (Decrease)

Total revenues(a):General Insurance $ 12,757 $12,928 (1)% $ 25,046 $25,831 (3)%Life Insurance & Retirement Services(b) 10,161 14,023 (28) 18,913 27,705 (32)Financial Services(c)(d) (3,605) 2,123 — (10,165) 4,324 —Asset Management(e) 797 1,781 (55) 648 3,450 (81)Other 208 263 (21) 80 394 (80)Consolidation and eliminations (385) 32 — (558) 91 —

Total $ 19,933 $31,150 (36)% $ 33,964 $61,795 (45)%Operating income (loss)(a):

General Insurance $ 827 $ 2,976 (72)% $ 2,164 $ 6,072 (64)%Life Insurance & Retirement Services(b) (2,401) 2,620 — (4,232) 4,901 —Financial Services(c)(d) (5,905) 47 — (14,677) 339 —Asset Management(e) (314) 927 — (1,565) 1,685 —Other (715) (460) — (1,483) (930) —Consolidation and eliminations (248) 218 — (227) 433 —

Total $ (8,756) $ 6,328 — $(20,020) $12,500 —%

(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) fromhedging 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 millionand $(430) million, respectively, in both revenues and operating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was$(476) million and $(882) million, respectively, in both revenues and operating income (loss). These amounts result primarily from interest rate and foreigncurrency 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 exchangegains 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 andoperating income (loss). For the six-month periods ended June 30, 2008 and 2007, the effect was $(199) million and $(603) million, respectively, in bothrevenues and operating income (loss). These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedgesof 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$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 other-than-temporary impairment charges of $882 million and $1.9 billion, respectively.

BOG-- FOIA 10-251 --000150

From: Warren HrungTo: 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; JimMahoney; Joyce Hansen; Lawrence Radecki; Lucinda M Brickler; Meg McConnell; Michael Schetzel; PatriciaMosser; 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; TimothyGeithner; Tobias Adrian; Warren Hrung; Wendy Ng; William BRODOWS; William Dudley; William Rutledge;William Walsh

Subject: Merrill report on AIGDate: 09/13/2008 05:35 PMAttachments: ML-S&P on AIG.pdf

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

Warren B. HrungAnalytical DevelopmentMarkets Group Federal Reserve Bank of New York(212) 720 - 6054

BOG-- FOIA 10-251 --000151

(b) (4)

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BOG-- FOIA 10-251 --000161

From: Warren HrungTo: Michael S GibsonCc: Adam AshcraftSubject: AIG CDS exposureDate: 09/13/2008 05:45 PM

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

Warren

Warren B. HrungAnalytical DevelopmentMarkets Group Federal Reserve Bank of New York(212) 720 - 6054

(b) (5)

BOG-- FOIA 10-251 --000162

From: Jon D GreenleeTo: Michael S GibsonSubject: Re: Rough cut at a liquidity sectionDate: 09/13/2008 05:58 PM

Haven't seen anything. I went home around 4. I'm not sure exactlywhat they are doing, but I faxed a bunch of insurance info from AMBest.



----- Original Message ----- From: Michael S Gibson Sent: 09/13/2008 05:27 PM EDT To: Jon Greenlee Subject: Re: Rough cut at a liquidity sectionJon,

I was offline for a couple hours - anything new on the solvencyanalysis 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 MichaelS Gibson/BOARD/FRS]


BOG-- FOIA 10-251 --000163

F om M chael S Gibson@f b govTo fCc Adam Ashc aft@ny f b o gSubject Re AIG CDS exposu eDa e 09/13/2008 06 15 M

Mike

WarrenHrung N FRS@FRS

09 3 2008 05 45 M

o Michael SGibson Boa d RS@BOARD

cc AdamAshc a t N RS@ RS

Sub ect AIG CDS exposu eLink

Mike, Just to check my numbers

Warren

Warren B. HrungAnalytical Deve opmentMarkets Group Federal Reserve Bank of New York(212) 720 - 605

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000164

From: Michael S GibsonTo: William B EnglishSubject: Fw: AIG Financial System Risk Evaluation.docDate: 09/13/2008 06:17 PMAttachments: 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 -----

TobiasAdrian/NY/FRS@FRS

09/13/2008 04:00 PM

To Michael S Gibson/BOARD/FRS@BOARD, AdamAshcraft/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS

cc Joshua Rosenberg/NY/FRS@FRS

Subject 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


The views in this message are those of the sender and not necessarily those of theFederal Reserve Bank of New York or the Federal Reserve System.

- AIG Financial System Risk Evaluation.doc Document is a duplicate

BOG-- FOIA 10-251 --000165

From: Michael S GibsonTo: Patrick M ParkinsonCc: Pat WhiteSubject: questionDate: 09/13/2008 06:25 PM

MG

(b) (5)

BOG-- FOIA 10-251 --000166

From: Patrick M ParkinsonTo: William BRODOWSCc: Mike Gibson; Pat WhiteSubject: Fw: questionDate: 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

BOG-- FOIA 10-251 --000167

From: William BRODOWSTo: Patrick M ParkinsonCc: Michael S Gibson; Pat WhiteSubject: Re: questionDate: 09/13/2008 06:29 PM

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

----- Original Message -----From: Patrick.M.ParkinsonSent: 09/13/2008 06:27 PM ASTTo: William BRODOWSCc: Michael Gibson; Pat WhiteSubject: Fw: question

Duplicate

BOG-- FOIA 10-251 --000168

From: Patricia MosserTo: Brian F.Madigan; Scott Alvarez; Deborah Bailey; Jon Greenlee; Mike GibsonSubject: Fw: AIG updateDate: 09/13/2008 07:40 PM

Apologies I meant to include you in the distribution. . Please ignor Richard's replkyand go to the message below. Elise will be in touch so we have all the rightinsurance experts involved in any call with them. -----------------------------Patricia C. Mosser, FRB-NYSent 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 tellme otherwise, but will need to know where to go and when, and to belet on to the Markets floor, if there isn't someone at the front door. Thanks.

▼ Patricia Mosser/NY/FRS

PatriciaMosser/NY/FRS

09/13/2008 07:26 PM

To Alejandro LaTorre/NY/FRS@FRS@NY, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,[email protected], CatherineVoigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS,Michael Schetzel/NY/FRS,[email protected], William Dudley/NY/FRS,Terrence Checki/NY/FRS, Elise Liebers/NY/FRS, MegMcConnell/NY/FRS@FRS, WilliamRutledge/NY/FRS@FRS@NY, Brian Peters/NY/FRS

cc

Subject AIG update

2 conversations this afternoon with AIG and NYSID:

AIG: Frenkel spoke with Kohn , who urged AIG to continue to pursueprivate sector solutions and asset sales. Noted continued reluctanceto do 13-3 lending.

AIG has put together a term sheet for NYSID , which they will bediscussing this evening. The term sheet would outline all pieces ofliquidity plan, and plans for debt and equity injections , plans for assetsales as well as regulatory forebearance to move assets from subs toparent.

AIG asked our views on whether and how to inform Treasurydepartment of their situation. (b) (5)

BOG-- FOIA 10-251 --000169

NYSID:

Elise, are you and your team available to talk with Dinallo's staff after9 am tomorrow? Also, could you please coordinate with Board BS&Rabout their availability?

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

(b) (5)

BOG-- FOIA 10-251 --000170

From: William R NelsonTo: William B EnglishCc: Michael S Gibson; Brian F Madigan; James A Clouse; Jon D Greenlee; Roberto Perli; Scott Alvarez; Deborah P

BaileySubject: Re: Partial memo draftDate: 09/13/2008 07:43 PMAttachments: aig ipc draft.doc

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 tomorrowmorning.

Bill N.

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ William B English/BOARD/FRS


09/13/2008 05:27 PM

To Brian F Madigan/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, AntoinetteGibson/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD

cc

Subject Partial memo draft

Duplicate

(b) (5)

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From: Michael S GibsonTo: William B English; Michael S Gibson; Brian F Madigan; James A Clouse; Jon D Greenlee; Roberto PerliSubject: Re: Partial memo draftDate: 09/13/2008 09:27 PMAttachments: AIG memo v2.mg.doc

Bill,

I added some details, especially on the derivatives stuff.

Mike



09/13/2008 05:32 PM

To Michael S Gibson/BOARD/FRS@BOARD

cc


Duplicate

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From: Diane FraserTo: Jon D Greenlee; Sabeth I SiddiqueCc: Elise Liebers; [email protected]; Adrienne HadenSubject: AIG Org. w/ assets + other info in advance of call w/ NY State Insurance Dept. tomorrow a.m.Date: 09/13/2008 10:28 PMAttachments: American International Group SNL Corp.Structure Report (9-08).doc

FYI - In general, state insurance statutes allow commercial insurance underwriters to pay outa 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 insuranceregulatory authority. State insurance regulatory authorities have the power to approveextraordinary dividends on a case-by-case basis.

Attached below is a tiering report showing the corporate structure for American InternationalGroup, Inc. (AIG). As you will see, AIG has many subsidiaries.

----- Forwarded by Diane Fraser/BOARD/FRS on 09/13/2008 10:16 PM -----

[email protected]

09/13/2008 09:04 PM


cc [email protected], [email protected],[email protected], [email protected]

Subject Conference call w/ NY State Insurance Dept. re: AIG isbeing 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 theconference call.

Diane

[email protected]

09/13/2008 08:06 PM To "Diane Fraser" <[email protected]> cc "Ms. Deborah P Bailey" <[email protected]>, "Adrienne Haden"

<[email protected]> Subject Fw: AIG update

Diane,

Can you get in touch with Elise and see if what she may need from us orpossibly Boston?

Thanks

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Duplicate

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(b) (4)

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From: William R NelsonTo: William B EnglishSubject: Re: Partial memo draftDate: 09/13/2008 10:39 PM

Ok. No,bi did'pn'tEmail: [email protected]: 202-452-3579Mobile: 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 yourversion of the document. If you don't get in before I do, I can do itwhen I get in. Did you make any changes to my version after theintro and before the part on lending? Let's try to avoid a versioncontrol problem if we can!

Thanks,Bill E.

▼ William R Nelson/BOARD/FRS


09/13/2008 07:43 PM


cc Michael S Gibson/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, ScottAlvarez/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD

Subject Re: Partial memo draft

Duplicate

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From: William R NelsonTo: Brian F MadiganSubject: Re: a key questionDate: 09/14/2008 04:35 AM

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ Brian F Madigan/BOARD/FRS


09/13/2008 05:35 PM

To William R Nelson/BOARD/FRS@BOARD

cc

Subject Re: a key question

Bill,

Brian



09/13/2008 05:08 PM


cc

Subject a key question

Duplicate

(b) (5)

(b) (5)

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From: William R NelsonTo: William WalshSubject: Fw: Failure of an insurance companyDate: 09/14/2008 04:43 AMAttachments: naicfrs.pdf

Hi Bill. Is this the study? Sorry I overlooked your email earlier.

--Bill

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542----- Forwarded by William R Nelson/BOARD/FRS on 09/14/2008 04:40 AM -----

Jon DGreenlee/BOARD/FRS

09/13/2008 12:55 PM

To William B English/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD

cc

Subject Failure of an insurance company

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

Jon


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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 NAICand the Federal Reserve System participating on the NAIC and Federal Reserve System’s jointTroubled Company Subgroup and does not necessarily express any official views of the stateinsurance 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

Ban k 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: 1 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.

1BOG-- FOIA 10-251 --000208

• 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.

3 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.

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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 cross-marketing 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

4 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.

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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.

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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 5 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

6 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 insurance-related 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

7 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.

9 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 computer-selected 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 full-scope 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, non-functionally regulated nonbank subsidiaries and certain foreign domiciled bank and non-bank 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

11 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 13 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 off-balance 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

14 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 on-balance 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

16 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.).

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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.

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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).

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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

18 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.

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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.

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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

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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.

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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.

20 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.

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Appendix A

Summary of State Regulation for Identifying and Supervising Financially Weakened Insurers

Regulatory Response Phase1 Trigger Points Explanation Informal2 Formal3 Comments

1 Periodic (annual

and quarterly) financial analysis

of statutory financial

statements

Annual Statements are filed by March 1 of each year. Quarterly

Statements are filed within 45 days following each quarter-end.

The annual statement review 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.

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.

NA

The NAIC Accreditation Program provides timelines

by which analysis of domestic insurers should

be completed by state insurance departments.

1 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. 2 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

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments 1 Scoring System

The NAIC Scoring System ratios and scores provide an

integrated approach to screening and analyzing the financial

condition of insurers.

Used in annual reviews, quarterly

reviews and 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.

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.

1 Analyst TeamSystem (ATS)

Review

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



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.

A- 2 BOG-- FOIA 10-251 --000235

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments 1 Financial

Condition Examination

An on-site examination may detect existing or potential

financial problems or may be used to investigate problems arising from routine financial

analysis.

Required by state law; state insurance commissioner has absolute power to conduct

examinations as appropriate; insurer must respond to examination report comments and

recommendations.

Examinations are conducted on either a full

or limited-scope basis. Full-scope examinations are conducted every 3 - 5

years. Limited-scope examinations may be

conducted more frequently, depending on

circumstances. 1 Model

Regulation Regarding Hazardous Financial Condition

This model is a Standard in the NAIC Accreditation Program.

The purpose of this regulation is to set forth standards, which the state insurance department may

use for identifying insurers found to be in an unsound financial condition and for authority to initiate action.

Standards considered and measured during

analysis process; analysis results may



These standards provide the basis for a court petition to

rehabilitate or liquidate.

All accredited states have passed laws substantially

similar to the NAIC model. A state’s rehabilitation and

liquidation act may incorporate by reference its

hazardous financial condition law.

1 ReinsuranceCompany Failure

An insurer's reinsurance program is closely monitored by

a state insurance department's staff and measured by various financial ratios. A significant rating downgrade or failure of

any reinsurer triggers a reaction from department staff to identify

affected insurers and to assess potential impact on the insurer's

solvency.

Analysis results may lead to: 1) phone or e-mail inquiry; 2) letter requesting additional


May result in limited-scope examination.

Credit for reinsurance is heavily regulated through

statutes, regulations, statutory accounting and reporting rules. These

rules are part of the NAIC Accreditation Program.

A- 3 BOG-- FOIA 10-251 --000236

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments 1 Holding

Company Filing

All insurers are required to 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.

Analysis results may lead to: 1) phone or e-mail inquiry; 2) letter requesting additional

information; or 3) face-to-face meetings

with management.

May result in limited-scope examination.

Filings are required pursuant to NAIC Insurance Holding

Company System Model Act. All accredited states

have passed laws substantially similar to the

NAIC model.

1

Market ConductFinding

All insurers periodically 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.

State insurance commissioner has absolute

power to conduct examinations as

appropriate; insurer must respond to examination report comments and

recommendations.

The NAIC continues to work toward developing standards of practice for

conducting market conduct examinations.

1 ActuarialOpinion

All insurers are required to 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.

Opinion statements or a change in actuary

may lead to: 1) phone or e-mail inquiry; 2)

letter requesting additional


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

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments 1 Independent

Audit Report (Report on Significant

Deficiencies in Internal Controls)

All insurers are required to obtain an opinion from an

independent auditor on their annual financial statements. In

addition, each insurer must 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.

Report findings or a change in auditor may lead to: 1) phone or e-mail inquiry; 2) letter requesting additional


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.

To the extent possible and appropriate, examiners

may utilize the work of the independent auditor,

following some re-testing.

2 Business orCorrective Plan

Closer monitoring requires 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 corrective action plan may be required under

general supervisory authority.

In some instances, state law explicitly requires the

insurer to file a business or corrective action plan. For

example, if an insurer triggers a certain RBC

action level, a Corrective Action Plan is required.

Some state insurance departments are moving to routinely request business

plans and financial projections from domestic insurers, particularly life

insurers.

A- 5 BOG-- FOIA 10-251 --000238

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments Risk-Based

Capital (RBC)

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.

RBC standards and actions are statutory requirements.

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 CompanyAction Level

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


A- 6 BOG-- FOIA 10-251 --000239

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments

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.

2

RBC RegulatoryAction 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.


A- 7 BOG-- FOIA 10-251 --000240

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments 3 RBC Authorized

Control Level

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.


3

RBC MandatoryControl Level

TAC of less than 70% triggers a 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).


A- 8 BOG-- FOIA 10-251 --000241

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments 3

AdministrativeSupervision

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.

Statutory requirements relating to administrative supervision vary by state.

4 Receivership

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.

Statutory requirements relating to receivership vary

by state.

Initial seizure order may be obtained ex parte in some situations. State insurance commissioner has broad

discretion in administering the receivership.

A- 9 BOG-- FOIA 10-251 --000242

Regulatory Response

Phase1 Trigger Points Explanation Informal2 Formal3 Comments

Receiver may attempt to rehabilitate the insurer or, if

rehabilitation is not practical, the receiver will liquidate the

company.

A- 10 BOG-- FOIA 10-251 --000243

This page intentionally left blank for printing purposes.

A- 11 BOG-- FOIA 10-251 --000244

B-1

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

Applicable Regulation/ Policy or Guidance1

Supervisory Action and Time Frames for Action if

Applicable 1) Quarterly surveillance results for state member banks

SR letter 00-7: System Bank Watch List Program

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.

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.)

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.

1 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.

BOG-- FOIA 10-251 --000245

B-2




Applicable 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.

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

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

FRS’s role to maintain stability of the banking system as well as role of prudential regulator for banking institutions.

Conduct monitoring and targeted reviews of banking organizations, as appropriate, and develop action plans.

5) Bank examinations and BHC inspections

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.

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).

BOG-- FOIA 10-251 --000246

B-3




Applicable 6) FHCs whose depository institution subsidiaries become less than well capitalized or are not well managed

Formal corrective action is required under section 4(m) of the BHC Act

• 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:

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

Well capitalized No action required Adequately capitalized No action required Undercapitalized FDICIA PCA provisions

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

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.

Significantly undercapitalized

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

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.

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

Conditions (see above) for “Undercapitalized” and “Significantly Undercapitalized” banks apply. The Federal Deposit Insurance Corporation (FDIC) may be appointed receiver within 90 days.

BOG-- FOIA 10-251 --000247

B-4




Applicable BHC capital deterioration BHC Act BHC capital deterioration may

trigger informal or formal action such a Memorandum of Understanding, Written Agreement, or Cease and Desist Order.

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.

FDIC is generally appointed receiver.

N/A

BOG-- FOIA 10-251 --000248

From: William R NelsonTo: Michael S GibsonSubject: Re: derivativesDate: 09/14/2008 04:51 AMAttachments: aig-derivatives.doc

sorry I overlooked this and didn't put this in the memo I circulated yesterdayevening. It's good stuff.

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ Michael S Gibson/Board/FRS

Michael SGibson/Board/FRS Sent by: Michael SGibson/BOARD/FRS

09/13/2008 01:57 PM

To Jon D Greenlee/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, ChristopherCalabia/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS,Alejandro LaTorre/NY/FRS@FRS, RobertoPerli/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD

cc

Subject derivatives

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

Mike

BOG-- FOIA 10-251 --000249

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BOG-- FOIA 10-251 --000251

From: Brian F MadiganTo: Michael S GibsonCc: James A Clouse; Jon D Greenlee; Michael S Gibson; Roberto Perli; William B EnglishSubject: Re: Partial memo draftDate: 09/14/2008 05:00 AMAttachments: AIG memo v2.mg.bfm.doc

I added a few comments to Mike's.

▼ Michael S Gibson/Board/FRS


09/13/2008 09:27 PM

To William B English/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD

cc


Bill,


Mike

[attachment "AIG memo v2.mg.doc" deleted by Brian FMadigan/BOARD/FRS]



09/13/2008 05:32 PM


cc


Duplicate

BOG-- FOIA 10-251 --000252

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BOG-- FOIA 10-251 --000260

From: Jon D GreenleeTo: Brian F MadiganCc: James A Clouse; Michael S Gibson; Roberto Perli; William B EnglishSubject: Re: Partial memo draftDate: 09/14/2008 07:32 AM

Thanks

Jon

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Brian F Madigan/BOARD/FRS


09/14/2008 05:00 AM


cc James A Clouse/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD


Duplicate

(b) (5)

BOG-- FOIA 10-251 --000261

From: Adam AshcraftTo: Michael S GibsonSubject: Fw: AIG and the discount windowDate: 09/14/2008 08:10 AMAttachments: aig 20080914.doc

ML-S&P on AIG.pdfCiti-AIG new stock price 9-2008.pdf

Adam B. AshcraftFinancial Intermediation FunctionFederal 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 ofthe Federal Reserve Bank of New York or the Federal Reserve System.----- Forwarded by Adam Ashcraft/NY/FRS on 09/14/2008 08:10 AM -----

AdamAshcraft/NY/FRS

09/14/2008 08:13 AM

To Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS,Beverly Hirtle/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS,Chris Burke/NY/FRS@FRS, HayleyBoesky/NY/FRS@FRS, Jamie McAndrews/NY/FRS@FRS,Jim Mahoney/NY/FRS@FRS, MegMcConnell/NY/FRS@FRS, PatriciaMosser/NY/FRS@FRS, Til Schuermann/NY/FRS@FRS,Tobias Adrian/NY/FRS@FRS, WarrenHrung/NY/FRS@FRS

cc

Subject AIG and the discount window

Short comment on the AIG situation, with references attached. One if the Merrilnote Warren circulated yesterday.

(b) (5)

BOG-- FOIA 10-251 --000262



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From: Brian F MadiganTo: Jon D GreenleeCc: James A Clouse; Michael S Gibson; Roberto Perli; William B EnglishSubject: Re: Partial memo draftDate: 09/14/2008 08:18 AM

Colleagues,

We need very quickly to draft the section on solvency. It does not need to be longor detailed, but needs to get across the most recent reported figures and our basicjudgment about the firm's solvency.

Thanks,Brian



09/14/2008 07:32 AM


cc James A Clouse/BOARD/FRS@Board, Michael SGibson/BOARD/FRS@Board, RobertoPerli/BOARD/FRS@Board, William BEnglish/BOARD/FRS@Board


Duplicate

b

(b) (5)

BOG-- FOIA 10-251 --000286

From: William R NelsonTo: James A Clouse; Roberto Perli; Brian F Madigan; William B EnglishSubject: press coverage of AIG's efforts to sell assetsDate: 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 $20billion asset sell-off as it fights to correct a slump in its shares and braces for the impact ofHurricane Ike, a London based newspaper said. The newspaper, without citing sources, saiddetails of the plan could come as early as Monday.

It said assets under the hammer included Transatlantic Holdings, AIG's New York-listedreinsurance group, and that Europe's Swiss Re and Munich Re were potential buyers. AIGand Swiss Re could not immediately be reached for comment.

Munich Re declined to comment. A source familiar with developments said that AIG couldannounce details of its turnaround plan much sooner than expected, including possible assetsales and how it will shore up capital. Media reports on Friday said that AIG could hold aninvestor call as early as Monday, and that the insurer had hired JPMorgan to advise it onraising fresh capital.

AIG has been hit hard by the global credit crunch and its shares plunged as much as 34.5per cent on Friday, stepping up the pressure for quick action. A portfolio of credit defaultswaps AIG wrote to guarantee securities linked to subprime mortgages has triggeredcumulative losses of $18 billion over the past 3 quarters.


[email protected]

09/14/2008 09:11 AM


cc

Subject ~Possible Untrusted Sender~ Economic Times

BOG-- FOIA 10-251 --000287

Dear [email protected], [email protected] believes you should read this article fromEconomic Times.com. Please click on the link below to go to the page. If you think someoneyou 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 TheEconomic Times

BOG-- FOIA 10-251 --000288

From: Patricia MosserTo: Alejandro LaTorre; Richard Charlton; Tobias Adrian; [email protected]; Catherine Voigts; Adam

Ashcraft; Michael Schetzel; Christopher Calabia; Brian F Madigan; Deborah P Bailey; Scott Alvarez; Jon DGreenlee; Michael S Gibson; [email protected]; Terrence Checki; Elise Liebers

Cc: Carol GrunwaldSubject: Conference Call re AIG w/ NYS Dept of Ins at 10:30Date: 09/14/2008 10:01 AM

Details below. Please invite appropriate folks from your area. Main topic ofdiscussin will be NYSID's view of financial health of the insurance subs. We will notbe talking about derivatives book.

----- Forwarded by Patricia Mosser/NY/FRS on 09/14/2008 09:54 AM -----

[email protected]

09/14/2008 09:49 AM


cc

Subject Call w/ NYS Dept of Ins

Dial-in: 888 296 6500Passcode: 7342442Time; 10;30 am

Please share with your colleages.

If you have any difficulty or any questions, feel free to contact me at 917577 0440.

Sent from my BlackBerry Wireless Handheld

(b) (5)

BOG-- FOIA 10-251 --000289

From: Coryann StefanssonTo: Steven M DurfeySubject: Re: Previous emailDate: 09/14/2008 10:08 AM

I have been paang the stuff on to them also...Coryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # 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 sharedwith Diane/Cahill, and we are still pulling together stuff for AIG. Tks,Durf

Steven M DurfeyLarge Bank DivisionTelephone 312-322-6844Mobile 312-953-6824Fax 312-322-5833

▼ Coryann Stefansson/BOARD/FRS@BOARD

CoryannStefansson/BOARD/FRS@BOARD

09/13/2008 12:08 PM

To Suzanna Costello/ATL/FRS@FRS, JamesBarnes/RICH/FRS@FRS, Steven MDurfey/BSR/CHI/FRS@FRS,[email protected],[email protected], SuzanneKillian/BOARD/FRS@BOARD, Phyllis LHarwell/BOARD/FRS@BOARD, WilliamCharwat/BOARD/FRS, ChrisHaley/BOS/FRS@FRS, KimJensik/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS, Jerrold LNewlon/CLEV - BSR12/CLEV/FRS@FRS

cc

Subject Previous email

At this point, I need you not to go to your banks regarding AIG orLehman but rather to go to you internal MIS to determine the impactof a bankruptcy of Lehman or AIG to your organization.....

BOG-- FOIA 10-251 --000290

thanks



BOG-- FOIA 10-251 --000291

From: [email protected]: [email protected]: Re: Fw: AIG and the discount windowDate: 09/14/2008 10:19 AMAttachments: aig 20080914.doc

ML-S&P on AIG.pdfCiti-AIG new stock price 9-2008.pdf

Adam,

Mike

AdamAshcraft/NY/FRS@FRS ToMichael S Gibson/BOARD/FRS@BOARD09/14/2008 08:10 ccAM

SubjectFw: AIG and the discount window


-----------------------------------------------------------------------------------------------------

The contents of this e-mail reflect the opinion of the author and not theopinion of the Federal Reserve Bank of New York or the Federal ReserveSystem.----- Forwarded by Adam Ashcraft/NY/FRS on 09/14/2008 08:10 AM -----

AdamAshcraft/NY/FRSTo09/14/2008 08:13 Adam Ashcraft/NY/FRS@FRS, AlejandroAM LaTorre/NY/FRS@FRS, Arthur

Angulo/NY/FRS@FRS, Beverly

(b) (5)

BOG-- FOIA 10-251 --000292

Hirtle/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS, ChrisBurke/NY/FRS@FRS, HayleyBoesky/NY/FRS@FRS, JamieMcAndrews/NY/FRS@FRS, JimMahoney/NY/FRS@FRS, MegMcConnell/NY/FRS@FRS, PatriciaMosser/NY/FRS@FRS, TilSchuermann/NY/FRS@FRS, TobiasAdrian/NY/FRS@FRS, WarrenHrung/NY/FRS@FRS

cc

SubjectAIG and the discount window

Duplicate

BOG-- FOIA 10-251 --000293

Meeting Invitation:Calendar EntrySubject: Fw: Call w/ NYS Dept of Ins / Dial-in: 888 296 6500 / Passcode: 7342442When Date: Sunday 09/14/2008Time: 10:30 AM - 11:00 AM (0 hours 30 minutes)Chair: Carol GrunwaldInvitees Required (to): 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 PBailey/BOARD/FRS@BOARD; Jim Mahoney/NY/FRS@FRS; Jon D Greenlee/BOARD/FRS@BOARD; Michael SGibson/BOARD/FRS@BOARD; Michael Schetzel/NY/FRS@FRS; Patricia Mosser/NY/FRS@FRS; RichardCharlton/NY/FRS@FRS; Scott Alvarez/BOARD/FRS@BOARD; Terrence Checki/NY/FRS@FRS; TobiasAdrian/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 ofdiscussin will be NYSID's view of financial health of the insurance subs. We will notbe talking about derivatives book.


[email protected]

09/14/2008 09:49 AM


cc





(b) (5)

BOG-- FOIA 10-251 --000294



[email protected]

09/14/2008 09:49 AM


cc






BOG-- FOIA 10-251 --000295

From: Christopher CalabiaTo: Patricia MosserCc: Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts;

[email protected]; Deborah P Bailey; [email protected]; Jon D Greenlee; Michael S Gibson;Michael Schetzel; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge

Subject: Re: Fw: Call w/ NYS Dept of Ins at 8:30 re AIGDate: 09/14/2008 10:25 AM

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


09/14/2008 10:11 AM

To Alejandro LaTorre/NY/FRS@FRS@NY, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,[email protected], CatherineVoigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS,Michael Schetzel/NY/FRS, ScottAlvarez/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD, ChristopherCalabia/NY/FRS, [email protected],Terrence Checki/NY/FRS, Jon DGreenlee/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, WilliamRutledge/NY/FRS@FRS@NY

cc Carol Grunwald/NY/FRS

Subject Fw: Call w/ NYS Dept of Ins at 8:30 re AIG

Duplicate

BOG-- FOIA 10-251 --000296

From: Christopher CalabiaTo: Patricia MosserCc: Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts;

[email protected]; Deborah P Bailey; [email protected]; Jon D Greenlee; Michael S Gibson;Michael Schetzel; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge

Subject: URGENT -- call delayed by 5 minutesDate: 09/14/2008 10:29 AM

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


09/14/2008 10:11 AM

To Alejandro LaTorre/NY/FRS@FRS@NY, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,[email protected], CatherineVoigts/NY/FRS@FRS, Adam Ashcraft/NY/FRS@FRS,Michael Schetzel/NY/FRS, ScottAlvarez/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD, ChristopherCalabia/NY/FRS, [email protected],Terrence Checki/NY/FRS, Jon DGreenlee/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, WilliamRutledge/NY/FRS@FRS@NY

cc Carol Grunwald/NY/FRS

Subject Fw: Call w/ NYS Dept of Ins at 8:30 re AIG

Duplicate

BOG-- FOIA 10-251 --000297

From: William R NelsonTo: Patricia MosserSubject: Get on the aig call nowDate: 09/14/2008 10:31 AM

Email: [email protected]: 202-452-3579Mobile: 202-725-3612

BOG-- FOIA 10-251 --000298

From: Jon D GreenleeTo: Christopher CalabiaCc: Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts;

[email protected]; Deborah P Bailey; [email protected]; Michael S Gibson; Michael Schetzel;Patricia Mosser; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge

Subject: Re: URGENT -- call delayed by 5 minutesDate: 09/14/2008 10:31 AM

They are on now and ready to go.

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Christopher Calabia/NY/FRS@FRS

ChristopherCalabia/NY/FRS@FRS

09/14/2008 10:29 AM

To Patricia Mosser/NY/FRS@FRS

cc Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Brian FMadigan/BOARD/FRS@BOARD, CarolGrunwald/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS, [email protected],Deborah P Bailey/BOARD/FRS@BOARD,[email protected], Jon DGreenlee/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, MichaelSchetzel/NY/FRS@FRS, Richard Charlton/NY/FRS@FRS,Scott Alvarez/BOARD/FRS@BOARD, TerrenceChecki/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,William Rutledge/NY/FRS@FRS

Subject URGENT -- call delayed by 5 minutes

Duplicate

Duplicate

BOG-- FOIA 10-251 --000299

From: Adam AshcraftTo: Michael S GibsonSubject: Re: Fw: AIG and the discount windowDate: 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

--------------------------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

(b) (5)

BOG-- FOIA 10-251 --000300

From: Christopher CalabiaTo: Jon D GreenleeCc: Adam Ashcraft; Alejandro LaTorre; Brian F Madigan; Carol Grunwald; Catherine Voigts;

[email protected]; Deborah P Bailey; [email protected]; Michael S Gibson; Michael Schetzel;Patricia Mosser; Richard Charlton; Scott Alvarez; Terrence Checki; Tobias Adrian; William Rutledge

Subject: Re: URGENT -- call delayed by 5 minutesDate: 09/14/2008 10:35 AM

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

Jon DGreenlee/BOARD/FRS@BOARD

09/14/2008 10:35 AM

To Christopher Calabia/NY/FRS@FRS

cc Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Brian FMadigan/BOARD/FRS@Board, CarolGrunwald/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS,[email protected], Deborah PBailey/BOARD/FRS@Board,[email protected], Michael SGibson/BOARD/FRS@Board, MichaelSchetzel/NY/FRS@FRS, PatriciaMosser/NY/FRS@FRS, RichardCharlton/NY/FRS@FRS, ScottAlvarez/BOARD/FRS@Board, TerrenceChecki/NY/FRS@FRS, TobiasAdrian/NY/FRS@FRS, WilliamRutledge/NY/FRS@FRS

Subject Re: URGENT -- call delayed by 5 minutes

They are on now and ready to go.

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Christopher Calabia/NY/FRS@FRS

Duplicate

BOG-- FOIA 10-251 --000301

From: [email protected]: [email protected]; [email protected]: paragraphsDate: 09/14/2008 11:42 AM

(b) (5)

BOG-- FOIA 10-251 --000302

From: Alejandro LaTorreTo: Patricia MosserCc: Christopher Calabia; William R NelsonSubject: Re: questions on callDate: 09/14/2008 12:24 PM



09/14/2008 11:51 AM


cc Christopher Calabia/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS@NY

Subject Re: questions on call

Alex is going to contact the Treasurer this morning to get clarity on the plan.....

▼ William R Nelson/BOARD/FRS@BOARD

William RNelson/BOARD/FRS@BOARD

09/14/2008 11:43 AM

To Patricia Mosser/NY/FRS@FRS

cc Christopher Calabia/NY/FRS@FRS

Subject questions on call

thanksBill

(b) (5)

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000303


BOG-- FOIA 10-251 --000304

From: William R NelsonTo: William B EnglishSubject: aig memoDate: 09/14/2008 01:23 PMAttachments: AIG memo v3.doc


BOG-- FOIA 10-251 --000305

(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000310

(b) (5)

BOG-- FOIA 10-251 --000311

(b) (5)

BOG-- FOIA 10-251 --000312

(b) (5)

BOG-- FOIA 10-251 --000313

(b) (5)

BOG-- FOIA 10-251 --000314

(b) (5)

BOG-- FOIA 10-251 --000315

(b) (5)

BOG-- FOIA 10-251 --000316

(b) (5)

BOG-- FOIA 10-251 --000317

From: Deborah P BaileyTo: Norah Barger; [email protected]: Fw: Anything on AIGDate: 09/14/2008 01:57 PM



09/14/2008 01:39 PM


cc

Subject Re: Anything on AIG

We had a call with NY State Insurance Department this morning. It sounded a bitmore promising than yesterday and compared with the Lehman situation

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

Jon

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

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

BOG-- FOIA 10-251 --000318

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Deborah P Bailey/BOARD/FRS


09/14/2008 01:16 PM

To Jon D Greenlee/BOARD/FRS

cc

Subject Anything on AIG

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

BOG-- FOIA 10-251 --000319

From: William R NelsonTo: Michael S Gibson; Roberto PerliSubject: aig memoDate: 09/14/2008 02:03 PMAttachments: AIG memo v3.doc


BOG-- FOIA 10-251 --000320

(b) (5)

BOG-- FOIA 10-251 --000321

(b) (5)

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(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000324

(b) (5)

BOG-- FOIA 10-251 --000325

(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000327

(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000329

(b) (5)

BOG-- FOIA 10-251 --000330

(b) (5)

BOG-- FOIA 10-251 --000331

From: William R NelsonTo: Jon D GreenleeSubject: aig memoDate: 09/14/2008 02:06 PMAttachments: AIG memo v3.doc

Jon,

here is the current draft of the memo for your comments. If you can't comment tilllater, check with my for a fresh draft.

thanks

Bill


Attachment is a duplicate

BOG-- FOIA 10-251 --000332

From: William R NelsonTo: Jon D GreenleeSubject: Fw: aig memoDate: 09/14/2008 02:26 PMAttachments: AIG memo v3.doc

you might want to hold off commenting on this.



09/14/2008 02:06 PM


cc

Subject aig memo

Duplicate

BOG-- FOIA 10-251 --000333

From: William R NelsonTo: Jon D GreenleeSubject: Re: Fw: aig memoDate: 09/14/2008 02:28 PM

Brian M. thinks it is unlikely it will go to the Board.

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ Jon D Greenlee/BOARD/FRS


09/14/2008 02:27 PM


cc

Subject Re: Fw: aig memo

okay - I was making some edits




09/14/2008 02:26 PM


cc

Subject Fw: aig memo

Duplicate

BOG-- FOIA 10-251 --000334

From: Michael S GibsonTo: William R NelsonCc: Roberto Perli; William B EnglishSubject: Re: aig memoDate: 09/14/2008 02:43 PMAttachments: AIG memo v3.mg.doc

My comments...



09/14/2008 02:03 PM

To Michael S Gibson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD

cc

Subject aig memo

[attachment "AIG memo v3.doc" deleted by Michael SGibson/BOARD/FRS]


BOG-- FOIA 10-251 --000335

(b) (5)

BOG-- FOIA 10-251 --000336

(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000338

(b) (5)

BOG-- FOIA 10-251 --000339

(b) (5)

BOG-- FOIA 10-251 --000340

(b) (5)

BOG-- FOIA 10-251 --000341

(b) (5)

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(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000344

(b) (5)

BOG-- FOIA 10-251 --000345

(b) (5)

BOG-- FOIA 10-251 --000346

From: Roberto PerliTo: William R NelsonCc: Michael S Gibson; William B EnglishSubject: Re: aig memoDate: 09/14/2008 02:52 PMAttachments: AIG memo v3.perli.doc

A few comments.



09/14/2008 02:03 PM

To Michael S Gibson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD

cc

Subject aig memo

[attachment "AIG memo v3.doc" deleted by Roberto Perli/BOARD/FRS]


BOG-- FOIA 10-251 --000347

(b) (5)

BOG-- FOIA 10-251 --000348

(b) (5)

BOG-- FOIA 10-251 --000349

(b) (5)

BOG-- FOIA 10-251 --000350

(b) (5)

BOG-- FOIA 10-251 --000351

(b) (5)

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(b) (5)

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(b) (5)

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(b) (5)

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(b) (5)

BOG-- FOIA 10-251 --000356

(b) (5)

BOG-- FOIA 10-251 --000357

(b) (5)

BOG-- FOIA 10-251 --000358

From: William R NelsonTo: Roberto PerliSubject: Re: aig memoDate: 09/14/2008 02:53 PMAttachments: AIG memo v3.perli.doc

thanks.

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ Roberto Perli/BOARD/FRS

RobertoPerli/BOARD/FRS

09/14/2008 02:52 PM


cc Michael S Gibson/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD

Subject Re: aig memo

Duplicate

BOG-- FOIA 10-251 --000359

F om Diane ase @f b govTo l fCc Diane ase @f b govSubject Re My p opo ed nse t to Moneta y Affai s pa ial memo d aftDate 09/14/2008 03 02 MAttachments 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 DGreenlee BOARD FRS

09 4 2008 07 33 AM

o Dianease BOARD RS@BOARD

cc

Sub ect 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 eeAssoc ate Direc orBoard of Governors of the Federal Reserve SystemPhone (202) 52-2962---- o wa ded by on D G een ee BOARD RS on 09 4 2008 07 32 AM - ---

Jon D Green ee BOARD FRS

09 4 2008 07 32 AM o B an

Madigan BOARD RS@BOARD cc ames A

C ouse BOARD RS@Boa dMichael SGibson BOARD RS@Boa dRobe to

e i BOARD RS@Boa dWi l am BEngl sh BOARD RS@Boa d

Subject Re a ial memo d a tL nk

Thanks

Jon

Jon Green eeAssoc ate Direc orBoard of Governors of the Federal Reserve SystemPhone (202) 52-2962

Br an F Madigan BOARD FRS

09 4 2008 05 00 AM o M chael S

G bson BOARD RS@BOARD

cc ames AC ouse BOARD RS@BOARDon D

G een ee BOARD RS@BOARDM chael SG bson BOARD RS@BOARDRobe o

e li BOARD RS@BOARDW l iam BEng 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 SG bson BOARD RS

09 3 2008 09 27 M

o W l iam BEng ish BOARD RS@BOARDM chael SG bson BOARD RS@BOARDB ian Madigan BOARD RS@BOARDames A

C ouse BOARD RS@BOARDon D

G een ee BOARD RS@BOARDRobe 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 BEnglish BOARD FRS

09 3 2008 05 32 M

o Michael SGibson BOARD RS@BOARD

cc

Subject a t al memo d a t

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.

[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

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000360

(b) (5)

BOG-- FOIA 10-251 --000361

(b) (5)

BOG-- FOIA 10-251 --000362

(b) (5)

BOG-- FOIA 10-251 --000363

(b) (5)

BOG-- FOIA 10-251 --000364

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BOG-- FOIA 10-251 --000366

(b) (5)

BOG-- FOIA 10-251 --000367

(b) (5)

BOG-- FOIA 10-251 --000368

From: Jon D GreenleeTo: Diane FraserSubject: Re: My proposed insert to Monetary Affairs partial memo draftDate: 09/14/2008 03:04 PM

Thanks - i just heard from Bill Nelson that they are going to hold off on the memofor 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 DGreenlee/BOARD/FRS]

Thanks,

Diane



09/14/2008 07:33 AM

To Diane Fraser/BOARD/FRS@BOARD

cc

Subject Fw: Partial memo draft

See my note below - can you work up a paragraph? I'll send thememo separately.


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

BOG-- FOIA 10-251 --000369


09/14/2008 07:32 AM


cc James A Clouse/BOARD/FRS@Board, Michael SGibson/BOARD/FRS@Board, RobertoPerli/BOARD/FRS@Board, William BEnglish/BOARD/FRS@Board


Thanks

Jon




09/14/2008 05:00 AM


cc James A Clouse/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD


I added a few comments to Mike's.

[attachment "AIG memo v2.mg.bfm.doc" deleted by Jon DGreenlee/BOARD/FRS]

(b) (5)

BOG-- FOIA 10-251 --000370



09/13/2008 09:27 PM

To William B English/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD

cc


Bill,


Mike

[attachment "AIG memo v2.mg.doc" deleted by Brian FMadigan/BOARD/FRS]



09/13/2008 05:32 PM


cc


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

Comments very welcome,Bill E.

[attachment "AIG memo v2.doc" deleted by Michael SGibson/BOARD/FRS] [attachment "Binder1.pdf" deleted by Michael SGibson/BOARD/FRS]

(b) (5)

BOG-- FOIA 10-251 --000371

From: Coryann StefanssonTo: BSR LIGSubject: Fw: Draft LFI Conference Call Notes - 9/13/08 7pm call - Revised VersionDate: 09/14/2008 03:20 PMAttachments: Conference Call Notes 9.13.08 evening version 2.doc

some of this may be out dated but I thought that i would forward




StacyO'Bryant/RICH/FRS@FRS

09/13/2008 09:42 PM

To Sarah Dahlgren/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, MichaelJohnson/SF/FRS@FRS, JenniferBurns/RICH/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD, CoryannStefansson/BOARD/FRS@BOARD, ChrisHaley/BOS/FRS@FRS, Raymond ABacon/BSR/CHI/FRS@FRS

cc

Subject Draft LFI Conference Call Notes - 9/13/08 7pm call- Revised Version

Restricted F.R.

Much better version of notes - thanks to Jennifer!

Stacy O'BryantLFI/LCBO Project Manager, Banking Supervision and Regulation/LargeComplex Bank OrganizationsThe Federal Reserve Bank of Richmond, Charlotte BranchOffice 704· 280· 0570 stacy.o'[email protected]

BOG-- FOIA 10-251 --000372

Restricted F.R. Page 1 Date: September 13, 2008 Author: S. O’Bryant

Key Takeaways:

Meeting Date: September 13, 2008 (7 p.m. EST) Meeting Subject: LFIT Conference Call Purpose:

LFIT/RSO Discussion on Market Events and Issues

Not Responsive

BOG-- FOIA 10-251 --000373


Not Responsive

BOG-- FOIA 10-251 --000374


• AIG •

•

•

•

• LT Strategy -

• Tobias Adrian – looked at AIG from an systemic risk perspective;

•

Not Responsive

Not Responsive

(b) (5)

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

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

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

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

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

BOG-- FOIA 10-251 --000375


Not Responsive

BOG-- FOIA 10-251 --000376

From: Alejandro LaTorreTo: Brian F MadiganSubject: Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 todayDate: 09/14/2008 03:24 PMAttachments: 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 -----

CatherineVoigts/NY/FRS

09/14/2008 12:26 PM

To Patricia Mosser/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS,Jim Mahoney/NY/FRS@FRS, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,Adam Ashcraft/NY/FRS@FRS

cc NY Banksup AIG Monitoring and Analysis

Subject Liquidity Plans from AIG - Call with InsuranceRegulators @ 10:30 today

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

BOG-- FOIA 10-251 --000377

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

Thanks,Cathy

* * * * * * * * *Catherine Voigts Credit Risk AdvisorBank Supervision GroupFederal Reserve Bank212-720-2383

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

BOG-- FOIA 10-251 --000378

1

(b) (5)

BOG-- FOIA 10-251 --000379

2

(b) (5)

BOG-- FOIA 10-251 --000380

From: Brian F MadiganTo: Scott Alvarez; James A Clouse; William B English; William R Nelson; Roberto Perli; Michael S Gibson; Deborah P

Bailey; Jon D GreenleeSubject: Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 todayDate: 09/14/2008 03:26 PMAttachments: Pros and Cons of Lending to AIG.doc

FYI.


AlejandroLaTorre/NY/FRS@FRS

09/14/2008 03:24 PM


cc

Subject Fw: Liquidity Plans from AIG - Call with InsuranceRegulators @ 10:30 today

Duplicate

Duplicate

BOG-- FOIA 10-251 --000381

From: Melissa A VanlandinghamTo: William CarlucciCc: Jeff StehmSubject: list of participants, affiliates, roles, etcDate: 09/14/2008 03:29 PMAttachments: 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 familygroups, and have added more as appropriate. AIG is on it as of this morning. Thesettling 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 VanlandinghamFinancial Services AnalystBoard of Governors of the Federal Reserve SystemDivision of Reserve Bank Operations and Payment Systems202-530-6285

BOG-- FOIA 10-251 --000382

BOG-- FOIA 10-251 --000383

From: William CarlucciTo: Melissa A VanlandinghamCc: Jeff StehmSubject: Re: list of participants, affiliates, roles, etcDate: 09/14/2008 03:32 PMAttachments: Selected Affiliated Members of Payments and Settlement Systems September 2008.xlsm

Thank you Melissa.

Best Regards,

William CarlucciSenior Bank ExaminerFederal Reserve Bank of New York212-720-8969/212-855-3390 (DTC)▼ Melissa A Vanlandingham/BOARD/FRS@BOARD

Melissa AVanlandingham/BOARD/FRS@BOARD

09/14/2008 03:32 PM

To William Carlucci/NY/FRS@FRS

cc Jeff Stehm/BOARD/FRS@BOARD

Subject list of participants, affiliates, roles, etc

Hi Bill,Duplicate

(b) (5)

BOG-- FOIA 10-251 --000384

From: William CarlucciTo: Jeff StehmSubject: Re: list of participants, affiliates, roles, etcDate: 09/14/2008 03:38 PM

Okay, thank you.

Best Regards,

William CarlucciSenior Bank ExaminerFederal Reserve Bank of New York212-720-8969/212-855-3390 (DTC)▼ Jeff Stehm/BOARD/FRS@BOARD

JeffStehm/BOARD/FRS@BOARD

09/14/2008 03:38 PM

To William Carlucci/NY/FRS@FRS

cc

Subject Re: list of participants, affiliates, roles, etc

Bill

▼ William Carlucci

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

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000385

From: William R NelsonTo: William B English; Roberto Perli; Michael S Gibson; Jon D GreenleeCc: Brian F Madigan; James A ClouseSubject: draft AIG memoDate: 09/14/2008 03:55 PMAttachments: AIG memo v3.doc

Here is the current draft of the AIG memo. No need for additional comments at thistime.

Bill


BOG-- FOIA 10-251 --000386

(b) (5)

BOG-- FOIA 10-251 --000387

(b) (5)

BOG-- FOIA 10-251 --000388

(b) (5)

BOG-- FOIA 10-251 --000389

(b) (5)

BOG-- FOIA 10-251 --000390

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BOG-- FOIA 10-251 --000391

(b) (5)

BOG-- FOIA 10-251 --000392

(b) (5)

BOG-- FOIA 10-251 --000393

(b) (5)

BOG-- FOIA 10-251 --000394

(b) (5)

BOG-- FOIA 10-251 --000395

(b) (5)

BOG-- FOIA 10-251 --000396

(b) (5)

BOG-- FOIA 10-251 --000397

(b) (5)

BOG-- FOIA 10-251 --000398

From: Coryann StefanssonTo: BSR LIGSubject: Fw: LFI Exposures to AIG (9/13/08 AM Update)Date: 09/14/2008 04:40 PMAttachments: LFI Key Credit Exposures to AIG 091308.xls





09/13/2008 01:00 PM

To BSR LFIC

cc


RESTRICTED FR---

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

____________________________________Brandon J. HallCounterparty Credit Risk Monitoring & AnalysisFederal Reserve Bank of New York33 Liberty St. | New York, NY 10045

P: 212-720-1349F: 212-720-1468E: [email protected]

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

BOG-- FOIA 10-251 --000399

BOG-- FOIA 10-251 --000400

From: Timothy GeithnerSent By: Michael HeldTo: ; Donald L KohnSubject: Fw: Pros and Cons on AIG lendingDate: 09/14/2008 04:41 PMAttachments: Pros and Cons of Lending to AIG.doc

Counterparty Exposure Report 9142008.xlsAIG Subsidiaries.ppt

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

AlejandroLaTorre/NY/FRS

09/14/2008 03:49 PM

To Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS,Hayley Boesky/NY/FRS@FRS, JimMahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS,Paul Whynott/NY/FRS@FRS, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,William Walsh/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS, Timothy Geithner/NY/FRS@FRS,Michael Silva/NY/FRS@FRS, MegMcConnell/NY/FRS@FRS, William Dudley/NY/FRS@FRS,William Rutledge/NY/FRS@FRS, TerrenceChecki/NY/FRS@FRS, Susan Stiehm/NY/FRS@FRS,Arthur Angulo/NY/FRS@FRS

cc Tanshel Pointer/NY/FRS@FRS

Subject Pros and Cons on AIG lending

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 toAIG (i.e. what firms stand to lose in the event of AIG default). The relevant columnis "Total Exposure to AIG, Ranked". With the exception of the "lending" column,these figures are loss estimates. Derivative loss estimates are derived from currentMTM provided by AIG.

3. A presentation describing what we know on AIG subsidiaries based on publiclyavailable information.

If there are questions, let us know.

Regards,

Alex

(b) (6)

BOG-- FOIA 10-251 --000401

1

(b) (5)

BOG-- FOIA 10-251 --000402

2

(b) (5)

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

AIG Revenues by Segment(2007 $110.1 billion)

P&C, 42%

Life, 46%

AIGFP, 8%

Asset Management

, 4%

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000406

Simplified Organizational Chart

American International Group, Inc (NY)

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

AIG Property Casualty Group AGC Life Insurance Co (MO)

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

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

See Next Slide

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

First SunAmerica Life Ins (NY)

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 bnCapital: $3.2 bn

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

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

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

BOG-- FOIA 10-251 --000408

AIG - Summary of Financial and Ratings Information of Major Subsidiaries

Financial data as of 6/30/08

($ in millions)American Life Insurance Co.

Variable Annuity Life

AIG Annuity Insurance Co

American General Life SunAmerica Life

National Union Fire Insurance Co.

American Home Assurance

American International Life

Type of Business L&H Insurance L&H Insurance L&H Insurance L&H Insurance L&H Insurance P&C P&C L&H Insurance

Home State DE TX TX TX AZ PA NY NY

Ratings*S&P 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)Moodys 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)Fitch 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)

Balance Sheet HighlightsTotal Assets $105,606 $62,880 $53,078 $39,489 $38,003 $34,190 $27,867 $7,005% of Consolidated Assets ($1.0 trillion) 10.1% 6.0% 5.1% 3.8% 3.6% 3.3% 2.7% 0.7%

Bonds $53,832 $24,287 $40,098 $23,880 $16,878 $14,171 $15,614 $5,640Separate Accounts $37,122 $26,649 $373 $2,685 $215 na na $120

Total Capital $7,113 $2,911 $3,224 $5,513 $4,748 $12,195 $6,527 $440Asset Valuation Reserve $363 $471 $1,012 $289 $1,047 na na $715Unrealized Gains (Loss) ($706) ($111) $23 ($906) ($497) $72 na $2

Total Adjusted Capital (YE 2007) na $3,632 $4,878 $6,839 $5,976 $11,373 $7,041 $662Authorized Control RBC Ratio (YE2007) na $568 $666 $1,063 $836 $2,818 $1,602 $92RBC Ratio (YE 2007) na 639% 732% 644% 714% 404% 440% 715%

Income Statement HighlightsNet Income (excl. Capital Gains) $580 $249 $191 $151 $300 $679 $491 $33Realized Capital Gains (Loss) ($381) ($1,551) ($2,325) ($1,260) ($1,085) $206 $1,185 ($290)

Dividends to Parent**2008 (first six months) $0 $0 $0 $0 $0 $1,109 $268 $502007 $1,033 $700 $400 $551 $700 $1,120 $615 $1002006 $200 $400 $150 $208 $349 $0 $0 $622005 $50 $400 $0 $441 $480 $98 $32 $502004 $50 $360 $0 $301 $26 $207 $63 $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: Tim P ClarkTo: Coryann StefanssonSubject: Re: Fw: LFI Exposures to AIG (9/13/08 AM Update)Date: 09/14/2008 04:45 PM

▼ Coryann Stefansson/BOARD/FRS

Coryann Stefansson/BOARD/FRS

09/14/2008 04:40 PM

To BSR LIG

cc

Subject Fw: LFI Exposures to AIG (9/13/08 AM Update)





09/13/2008 01:00 PM

To BSR LFIC

cc


RESTRICTED FR---

Below and attached please find the most current version of LFI credit exposures to AIG. This data represents the bestinformation 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

(b) (5)

BOG-- FOIA 10-251 --000411

From: Donald L KohnTo: Timothy GeithnerSubject: Re: Fw: Pros and Cons on AIG lendingDate: 09/14/2008 05:00 PM

I would add

▼ Timothy Geithner/NY/FRS@FRS

TimothyGeithner/NY/FRS@FRS Sent by: MichaelHeld/NY/FRS@FRS

09/14/2008 04:41 PM

To Donald LKohn/BOARD/FRS@BOARD

cc

Subject Fw: Pros and Cons on AIG lending

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


09/14/2008 03:49 PM

To Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS,Hayley Boesky/NY/FRS@FRS, JimMahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS,Paul Whynott/NY/FRS@FRS, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,William Walsh/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS, Timothy Geithner/NY/FRS@FRS,Michael Silva/NY/FRS@FRS, MegMcConnell/NY/FRS@FRS, William Dudley/NY/FRS@FRS,William Rutledge/NY/FRS@FRS, TerrenceChecki/NY/FRS@FRS, Susan Stiehm/NY/FRS@FRS,Arthur Angulo/NY/FRS@FRS

cc Tanshel Pointer/NY/FRS@FRS

Subject Pros and Cons on AIG lending

(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000412

From: Patricia MosserTo: 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; AzishFilabi; Terrence Checki; Brian F Madigan; Scott Alvarez; Deborah P Bailey; Jon D Greenlee

Subject: AIG updateDate: 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 inserious doubt, due to withdrawal of one of the private equity investors, That plan combined private equity investment with asset sales, upstreaming ofassets from P&C insurance subs to the parent, and a "wrap" of their GICs by

to prevent the need to post collateral.

In the new plan, would provide equity jointly with Wehave very few details, but on the surface, it appears to be closer to a takeoveroffer. Effectively AIG would increase their shares outstanding by more than 100%,allowing to control the firm. The offer is also contingent uponAIG 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.

(b) (4)

(b) (4)

(b) (4) (b) (4)

(b) (4)

BOG-- FOIA 10-251 --000413

From: [email protected]: William NelsonSubject: Fw: My proposed insert to Monetary Affairs partial memo draftDate: 09/14/2008 06:40 PMAttachments: AIG memo v2.mg.bfm - DF edits 9-14-08.doc

Bill,

Here is something that you may find helpful for the memo. Given the emailTrish just sent we may need to get it ready again.


----- Original Message -----From: Diane FraserSent: 09/14/2008 03:02 PM EDTTo: Jon GreenleeCc: Diane FraserSubject: 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: AIGmemo v2.mg.bfm - DF edits 9-14-08.doc)

Thanks,

Diane

Jon DGreenlee/BOARD/FRS ToDiane Fraser/BOARD/FRS@BOARD09/14/2008 07:33 ccAM

SubjectFw: Partial memo draft

Duplicate

BOG-- FOIA 10-251 --000414

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

Duplicate

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: [email protected]: Diane Fraser; Adrienne HadenSubject: Fw: AIG updateDate: 09/14/2008 06:41 PM

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

----- Original Message -----From: Patricia MosserSent: 09/14/2008 06:40 PM EDTTo: Adam Ashcraft; Alejandro LaTorre; Brian Peters; Christine Cumming;

Christopher Calabia; Elise Liebers; Hayley Boesky; Jim Mahoney; PatriciaMosser; Paul Whynott; Richard Charlton; Tobias Adrian; William Walsh; AzishFilabi; Terrence Checki; Brian Madigan; Scott Alvarez; Deborah Bailey; JonGreenleeSubject: AIG updateFrom AIG CFO and Vice Chm:

Duplicate

BOG-- FOIA 10-251 --000424

From: Brian F MadiganTo: James A Clouse; William B English; William R Nelson; Roberto Perli; Michael S Gibson; Patrick M ParkinsonCc: Brian F MadiganSubject: Fw: AIG updateDate: 09/14/2008 06:46 PM



09/14/2008 06:36 PM

To Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Brian Peters/NY/FRS@FRS,Christine Cumming/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS,Hayley Boesky/NY/FRS@FRS, JimMahoney/NY/FRS@FRS, Patricia Mosser/NY/FRS@FRS,Paul Whynott/NY/FRS@FRS, RichardCharlton/NY/FRS@FRS, Tobias Adrian/NY/FRS@FRS,William Walsh/NY/FRS@FRS, AzishFilabi/NY/FRS@FRS, Terrence Checki/NY/FRS, Brian FMadigan/BOARD/FRS@BOARD, ScottAlvarez/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD

cc

Subject AIG update

From AIG CFO and Vice Chm:Duplicate

BOG-- FOIA 10-251 --000425

From: Deborah P BaileyTo: ; Donald L Kohn; Randall S Kroszner; Elizabeth A Duke; Kevin Warsh; Brian F Madigan; Scott

AlvarezCc: Roger ColeSubject: Fw: AIG updateDate: 09/14/2008 06:47 PMImportance: High

Please see the update from Trish. The capital injection by seems injeopardy.

---- Forwarded by Deborah P Bailey/BOARD/FRS on 09/14/2008 06:42 PM -----


09/14/2008 06:36 PM


cc

Subject AIG update


(b) (6)

Duplicate

(b) (4)

BOG-- FOIA 10-251 --000426

From: Deborah P BaileyTo: Norah Barger; Coryann StefanssonSubject: Fw: AIG updateDate: 09/14/2008 06:59 PM



09/14/2008 06:36 PM


cc

Subject AIG update


Duplicate

BOG-- FOIA 10-251 --000427

From: William B EnglishTo: Brian F MadiganSubject: AIGDate: 09/14/2008 07:15 PM

Brian-

If 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: William R NelsonTo: Patricia MosserSubject: Re: Fw: AIG updateDate: 09/14/2008 07:31 PM

that sucks. I thought we'd dodged this one.



09/14/2008 06:46 PM

To James A Clouse/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Patrick MParkinson/BOARD/FRS@BOARD


Subject Fw: AIG update



09/14/2008 06:36 PM


cc

Subject AIG update


Duplicate

BOG-- FOIA 10-251 --000429

From: William R NelsonTo: [email protected]: Re: Fw: My proposed insert to Monetary Affairs partial memo draftDate: 09/14/2008 07:32 PMAttachments: AIG memo v2.mg.bfm - DF edits 9-14-08.doc

thanks Jon.

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ [email protected]

[email protected]

09/14/2008 06:40 PM

To "William Nelson" <[email protected]>

cc

Subject Fw: My proposed insert to Monetary Affairs partial memo draft

Bill,

Here is something that you may find helpful for the memo. Given theemailTrish just sent we may need to get it ready again.


Duplicate

BOG-- FOIA 10-251 --000430

From: Jon D GreenleeTo: Sabeth I Siddique; James EmbersitSubject: Fw: AIG updateDate: 09/14/2008 07:36 PM



09/14/2008 06:36 PM


cc

Subject AIG update


BOG-- FOIA 10-251 --000431

From: Adam AshcraftTo: 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; TerrenceChecki; Brian F Madigan; Scott Alvarez; Deborah P Bailey; Jon D Greenlee

Subject: Re: AIG updateDate: 09/14/2008 07:47 PM

--------------------------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; PatriciaMosser; Paul Whynott; Richard Charlton; Tobias Adrian; William Walsh; AzishFilabi; Terrence Checki; Brian Madigan; Scott Alvarez; Deborah Bailey; JonGreenlee Subject: AIG update


(b) (5)

BOG-- FOIA 10-251 --000432

From: [email protected]: Sabeth Siddique; James Embersit; Adrienne Haden; [email protected]: Fw: State Street and RBS UpdateDate: 09/14/2008 08:19 PMAttachments: GPCAN009 EXCHANGE 09112008-113640.PDF


----- Original Message -----From: Chris HaleySent: 09/14/2008 08:19 PM EDTTo: NY Bank Sup - CPC UpdatesCc: 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; PaulWebster; Tony Bardascino; Timothy Daniels; Erin Long; Ken Fortier;Genevievette Walker; Kwayne JenningsSubject: State Street and RBS UpdateState Street Update

Highlights of discussion with Stefan Gavell:

Next names they are worried about are Merrill and AIG.

Not Responsive

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

Not Responsive

BOG-- FOIA 10-251 --000433

(See attached file: GPCAN009_EXCHANGE_09112008-113640.PDF)

That's all for now......Chris - GPCAN009 EXCHANGE 09112008-113640.PDF

Not Responsive

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: Alejandro LaTorreTo: Gustavo A Suarez; JNellie LiangSubject: AIG commercial paper outstandingsDate: 09/14/2008 09:19 PM

Nellie/Gustavo;

Any chance we can the underwriter, outstandings and rates for AIGs CP and ABCPprograms; again very much in the spirit of what you've produced in the past firstthing in the am tomorrow. Thanks!

Regards,

Alex

BOG-- FOIA 10-251 --000438

From: JNellie LiangTo: Alejandro LaTorreCc: Gustavo A Suarez; JNellie Liang; Daniel M CovitzSubject: Re: AIG commercial paper outstandingsDate: 09/14/2008 09:25 PM

Yes, we'll try our best.

▼ Alejandro LaTorre/NY/FRS@FRS


09/14/2008 09:19 PM

To Gustavo A Suarez/BOARD/FRS@BOARD, JNellieLiang/BOARD/FRS@BOARD

cc

Subject AIG commercial paper outstandings

Duplicate

BOG-- FOIA 10-251 --000439

From: Alejandro LaTorreTo: JNellie LiangCc: Daniel M Covitz; Gustavo A Suarez; JNellie LiangSubject: Re: AIG commercial paper outstandingsDate: 09/14/2008 09:26 PM

Thank you.

▼ JNellie Liang/BOARD/FRS@BOARD

JNellieLiang/BOARD/FRS@BOARD

09/14/2008 09:28 PM

To Alejandro LaTorre/NY/FRS@FRS

cc Gustavo A Suarez/BOARD/FRS@BOARD, JNellieLiang/BOARD/FRS@BOARD, Daniel MCovitz/BOARD/FRS@BOARD

Subject Re: AIG commercial paper outstandings

Duplicate

BOG-- FOIA 10-251 --000440

From: [email protected]: [email protected]: [email protected]; [email protected]; [email protected]; [email protected];

[email protected]: Notes from 9-14-08 conf. call with NYSID Superintendent Eric Dinallo re: AIGDate: 09/14/2008 10:06 PMAttachments: 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 thediscussions this morning with New York State Insurance Department regulatorsconcerning AIG. Many thanks to the folks working with you on the AIG assignmentfor 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

1

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)

BOG-- FOIA 10-251 --000442

RESTRICTED FR

2

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

BOG-- FOIA 10-251 --000443

RESTRICTED FR

3

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

BOG-- FOIA 10-251 --000444

RESTRICTED FR

4

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

BOG-- FOIA 10-251 --000445

From: [email protected]: [email protected]: [email protected]; [email protected]: Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIGDate: 09/14/2008 10:09 PMAttachments: 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


BOG-- FOIA 10-251 --000446

From: Donald L KohnTo: ; Timothy GeithnerCc: [email protected]; Scott Alvarez; Deborah P BaileySubject: AIGDate: 09/14/2008 10:14 PM

Call from Frankel and Willumsted tonight renewing request for FR credit. Mainpoints: Expect downgrade tomorrow which will accelerate demand for collateral. Probably enough liquidity to get to Weds., but not much further. Need 50 bliquidity. Have 8, can get 15 more out of insurance subs, but would only beapproved if part of plan to get back to health. Board rejected offer, whichhe described as, in effect, 10b of equity in exchange for 60 percent of the companyand conditioned on access to Fed window. (Also would fire board and uppermanagement.) Board voted to authorize sale of subs if necessary to repay FR credit

Two asset sales in negotiation forcombined 11-13 b, but neither are sure and both would require regualtory approvalsand hence take months. talking a bout 10b equity, but very vague. portrayed access to FR credit as necessary to enable equity raise. Notjhing toannounce tomorrow morning.

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

(b) (6)

(b) (5)

(b) (4)

(b) (5)

(b) (4)

BOG-- FOIA 10-251 --000447

From: Michael S GibsonTo: Patrick M ParkinsonSubject: Fw: draft AIG memoDate: 09/14/2008 10:16 PMAttachments: 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 -----


09/14/2008 03:55 PM

To William B English/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD

cc Brian F Madigan/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD

Subject draft AIG memo

Here is the current draft of the AIG memo. No need for additional comments at thistime.

Bill


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

(b) (5)

BOG-- FOIA 10-251 --000459

(b) (5)

BOG-- FOIA 10-251 --000460

From: William R NelsonTo: Sandy KriegerSubject: AIGDate: 09/14/2008 10:31 PM

Hi Sandy,

Bill


(b) (5)

BOG-- FOIA 10-251 --000461

From: William R NelsonTo: Sandy KriegerSubject: Re: AIGDate: 09/14/2008 10:41 PM

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ Sandy Krieger/NY/FRS@FRS

SandyKrieger/NY/FRS@FRS

09/14/2008 10:39 PM


cc

Subject Re: AIG

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

(b) (5)

BOG-- FOIA 10-251 --000462

From: Craig F MarchbanksTo: James Embersit; David K Lynch; Ricardo Crumble; Mary L ArnettSubject: Fw: SGNY updateDate: 09/15/2008 12:18 AM

Regards,

Craig F. MarchbanksFederal Reserve Board of GovernorsBanking Supervision & RegulationMarket & Liquidity Risk Section(202) 452-3442 - Office(202) 446-7051 - Cell----- Forwarded by Craig F Marchbanks/BOARD/FRS on 09/15/2008 12:17 AM -----

DennisRyan/NY/FRS@FRS

09/15/2008 12:05 AM

To Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS,Anthony Cirillo/NY/FRS@FRS, ArthurAngulo/NY/FRS@FRS, Ashish Bhatia/NY/FRS@FRS,Barbara Yelcich/NY/FRS@FRS, BardStermasi/NY/FRS@FRS, Brandon Hall/NY/FRS@FRS,Brian Peters/NY/FRS@FRS, BridgetHabib/NY/FRS@FRS, Caren Cox/NY/FRS@FRS, CarolineFrawley/NY/FRS@FRS, Catherine ATilford/BOARD/FRS@BOARD, CatherineVoigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS, ChrisMcCurdy/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS,Corbin Long/NY/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, Craig FMarchbanks/BOARD/FRS@BOARD, DanielMuccia/NY/FRS@FRS, Debra Capurso/NY/FRS@FRS,Denise Goodstein/NY/FRS@FRS, DennisRyan/NY/FRS@FRS, Dexter Williams/NY/FRS@FRS,Diane Rose/RICH/FRS@FRS, DianneDobbeck/NY/FRS@FRS,[email protected], GretchenCappiello/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS,Helen Mucciolo/NY/FRS@FRS, HomerHill/NY/FRS@FRS, Jack Jennings/BOARD/FRS@BOARD,James Hodgetts/NY/FRS@FRS, JamesWall/NY/FRS@FRS, Jan Voigts/NY/FRS@FRS, JaneMajeski/NY/FRS@FRS, Jane Wakefield/NY/FRS@FRS,Jeanmarie Davis/NY/FRS@FRS, JenniferBurns/RICH/FRS@FRS, Jim Mahoney/NY/FRS@FRS,John Beebe/RICH/FRS@FRS, JohnHeinze/NY/FRS@FRS, John Leiby/NY/FRS@FRS, JohnReynolds/NY/FRS@FRS, John Ricketti/NY/FRS@FRS,John Ruocco/NY/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD, JonathanPolk/NY/FRS@FRS, Joseph Galati/NY/FRS@FRS, JudithJ Gruttman/NY/FRS@FRS, JyotiKohli/BOARD/FRS@BOARD, KaraSulmasy/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS,Katheryn Van der Celen/NY/FRS@FRS, KathrynChen/NY/FRS@FRS, Kevin Clarke/NY/FRS@FRS, KevinLee/NY/FRS@FRS, Kirsten Harlow/NY/FRS@FRS, KyleGrieser/NY/FRS@FRS, Lance Auer/NY/FRS@FRS, LarryBonnemere/NY/FRS@FRS, Laura AMacedo/BOARD/FRS@BOARD, LilyTham/NY/FRS@FRS, Lisa A White/RICH/FRS@FRS,Lisa Joniaux/NY/FRS@FRS, Lucinda MBrickler/NY/FRS@FRS, Lydia Tshulos/NY/FRS@FRS,Marilyn Arbuthnott/NY/FRS@FRS, MarkScapp/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS,

BOG-- FOIA 10-251 --000463

Pamela S Powell/BOARD/FRS@BOARD, PatSoriano/BOARD/FRS@BOARD, PatrickRoche/NY/FRS@FRS, Philip Aquilino/SF/FRS@FRS,Ralph Santasiero/NY/FRS@FRS, RichardNaylor/BOARD/FRS@BOARD, RichardRoberts/NY/FRS@FRS, RichardWesterkamp/RICH/FRS@FRS, RobardWilliams/NY/FRS@FRS, Robert Gutierrez/NY/FRS@FRS,Roger Graham/NY/FRS@FRS, RonaldStroz/NY/FRS@FRS, Sandy Krieger/NY/FRS@FRS, SaraMahmoud/NY/FRS@FRS, SarahDahlgren/NY/FRS@FRS, [email protected],Stanley Poszywak/RICH/FRS@FRS, StephanieChaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS,Steven Mirsky/NY/FRS@FRS, Susan GBallinger/NY/FRS@FRS, TerryMuckleroy/BOARD/FRS@BOARD, TheodoreLubke/NY/FRS@FRS, Theresa Barry/BOS/FRS@FRS,[email protected], ToddWaszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS,William BRODOWS/NY/FRS@FRS, WilliamHallacy/NY/FRS@FRS, Wing Oon/NY/FRS@FRS, ZahraEl-Mekkawy/NY/FRS@FRS

cc Adrian Lawrence/NY/FRS@FRS, Dmitry JGershik/NY/FRS@FRS, RenukaVijayanathan/NY/FRS@FRS, Hasan Latif/NY/FRS@FRS

Subject SGNY update

Restricted FR

SG - Diony Lebot (NY - CEO), Mark Kaplan (NY - CAO) , Liz Hogan (NY - Co head ofFixed Income, Currency and Commodities), Francois Barthelemy (NY - head of Equitytrading), Jerome Jacques (NY - Co head of Fixed Income, Currency andCommodities), 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: William R NelsonTo: Brian F MadiganSubject: Fw: My proposed insert to Monetary Affairs partial memo draftDate: 09/15/2008 06:58 AMAttachments: AIG memo v2.mg.bfm - DF edits 9-14-08.doc

this might be worth adding. see text in red below.


[email protected]

09/14/2008 06:40 PM

To "William Nelson" <[email protected]>

cc

Subject Fw: My proposed insert to Monetary Affairs partialmemo draft

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

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000466

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

We can provide some language on this later today.

Thanks

Jon


(b) (5)

Duplicate

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: William R NelsonTo: Brian F MadiganSubject: Re: Fw: Liquidity Plans from AIG - Call with Insurance Regulators @ 10:30 todayDate: 09/15/2008 07:31 AMAttachments: Pros and Cons of Lending to AIG.doc



09/14/2008 03:26 PM

To Scott Alvarez/BOARD/FRS@BOARD, James AClouse/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, RobertoPerli/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD

cc


FYI.



09/14/2008 03:24 PM


cc


Duplicate

Duplicate

BOG-- FOIA 10-251 --000476

From: William R NelsonTo: Brian F MadiganSubject: aig's value is down 44 percent this morning ...Date: 09/15/2008 08:03 AMAttachments: AIG memo v4.doc

Binder1.pdf

.... on the silence about a liquidity deal.

here is the document and the appendix.


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










$393,170) $ 393,316 $ 397,372



Equity securities:








(2008 – $11,359; 2007 – $10,499) 43,887 41,984








2008 – $36; 2007 – $233) 33,311 31,234





Cash 2,229 2,284








$5,446) 5,692 5,518


Goodwill 10,661 9,414


Total assets $1,049,876 $1,048,361


1 BOG-- FOIA 10-251 --000490
















$8,338) 9,659 8,331





value: 2008 – $240) 6,165 4,903











2,948,038,001; 2007 – 2,751,327,476 7,370 6,878









2 BOG-- FOIA 10-251 --000491









portfolio (5,565) — (14,672) —

Other income 3,116 3,792 6,717 7,741

Total revenues 19,933 31,150 33,964 61,795








Net income (loss) $ (5,357) $ 4,277 $(13,162) $ 8,407


Diluted $ (2.06) $ 1.64 $ (5.11) $ 3.21



Diluted 2,605 2,613 2,575 2,621


3 BOG-- FOIA 10-251 --000492


Segment Results







Total $ (8,756) $ 6,328 — $(20,020) $12,500 —%






BOG-- FOIA 10-251 --000493

From: William R NelsonTo: Roberto PerliSubject: aigDate: 09/15/2008 08:28 AM

what were they rated by the three rating agencies on Friday? (long term seniorunsecured). thanks.


BOG-- FOIA 10-251 --000494

From: Kevin WarshTo: Michelle A SmithSubject: Re: Liesman wonders if he can sayDate: 09/15/2008 08:33 AM

▼ Michelle A Smith/BOARD/FRS

Michelle ASmith/BOARD/FRS

09/14/2008 11:31 PM

To Kevin Warsh/BOARD/FRS@BOARD

cc

Subject Liesman wonders if he can say

That the fed thinks aig shd pursue all other options before coming tous. Is that too explosive? Seems reasonable but maybe not reasonable forus to say or for steve to hype.

(b) (5)

BOG-- FOIA 10-251 --000495

From: [email protected]: [email protected]: Re: CPDate: 09/15/2008 08:47 AM

yes, and we are sending something up to NY on AIG this morning.

[email protected]/15/2008 08:39 "Nellie Liang"AM <[email protected]>

cc

SubjectCP

Is Gustavo monitoring the roll rate at major nonbank financial issuers? Pat

BOG-- FOIA 10-251 --000496

From: William R NelsonTo: Brian F MadiganSubject: aig slightly revisedDate: 09/15/2008 08:47 AMAttachments: AIG memo v4.doc

Binder1.pdf


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

(b) (5)

BOG-- FOIA 10-251 --000504

(b) (5)

BOG-- FOIA 10-251 --000505

(b) (5)

BOG-- FOIA 10-251 --000506

(b) (5)

BOG-- FOIA 10-251 --000507

(b) (5)

BOG-- FOIA 10-251 --000508

(b) (5)

BOG-- FOIA 10-251 --000509










$393,170) $ 393,316 $ 397,372



Equity securities:








(2008 – $11,359; 2007 – $10,499) 43,887 41,984








2008 – $36; 2007 – $233) 33,311 31,234





Cash 2,229 2,284








$5,446) 5,692 5,518


Goodwill 10,661 9,414


Total assets $1,049,876 $1,048,361


1 BOG-- FOIA 10-251 --000510
















$8,338) 9,659 8,331





value: 2008 – $240) 6,165 4,903











2,948,038,001; 2007 – 2,751,327,476 7,370 6,878









2 BOG-- FOIA 10-251 --000511









portfolio (5,565) — (14,672) —

Other income 3,116 3,792 6,717 7,741

Total revenues 19,933 31,150 33,964 61,795








Net income (loss) $ (5,357) $ 4,277 $(13,162) $ 8,407


Diluted $ (2.06) $ 1.64 $ (5.11) $ 3.21



Diluted 2,605 2,613 2,575 2,621


3 BOG-- FOIA 10-251 --000512


Segment Results







Total $ (8,756) $ 6,328 — $(20,020) $12,500 —%






BOG-- FOIA 10-251 --000513

From: Diane FraserTo: Elise Liebers; Christopher CalabiaCc: [email protected]: William B EnglishSubject: News re: AIG, facing liquidity crunch, seeking loan from FedDate: 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 ratingdowngrades and shore up the capital of its holding company, has made an unprecedentedapproach 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 theWall Street Journal and business news channel CNBC. The New York Times reportedSunday evening that AIG was seeking $40 billion in aid to avoid a downgrade from creditrating agencies.

The Fed normally oversees monetary policy and supervision of banks, but CNBC said AIGwas seeking the funds as a temporary measure and planned to repay the Fed with theproceeds 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 beenattempting to hammer out an emergency strategic plan after its shares fell nearly 50% lastweek on fears it faced a liquidity crisis.

AIG has been negotiating with various parties including officials from the New YorkInsurance Department and private equity firms as it seeks ways to free up capital, raise newcapital and protect policyholders.

Regulators including New York Insurance Superintendent Eric Dinallo have been holed upat 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 aperson from the New York Insurance Department, who asked not to be named.

Former AIG CEO Maurice "Hank" Greenberg, who ran the company for nearly fourdecades, 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 onmortgage derivatives, has had to act quickly after Standard & Poor's said on Friday it maydowngrade 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 policiescarry 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, andworking 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 profitableaircraft 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 ofAIG.

AIG was founded in China 89 years ago. In the years since, largely under Mr. Greenberg'swatch, it grew into one of the world's largest insurers, spanning 130 countries and territoriesand 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 disgruntledover 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: Roberto PerliTo: William R NelsonSubject: Re: aigDate: 09/15/2008 08:52 AM

Aa3 and AA-, I don't know fitch



09/15/2008 08:28 AM

To Roberto Perli/BOARD/FRS@BOARD

cc

Subject aig

what were they rated by the three rating agencies on Friday? (longterm senior unsecured). thanks.


BOG-- FOIA 10-251 --000517

From: Donald L KohnTo: Timothy GeithnerCc: [email protected]; Scott Alvarez; Patrick M ParkinsonSubject: Fw: Thank youDate: 09/15/2008 08:57 AM

----- Forwarded by Donald L Kohn/BOARD/FRS on 09/15/2008 08:54 AM -----


09/15/2008 08:51 AM


cc

Subject Fw: Thank you

FYI.


(b) (6)

(b) (6)

Not Responsive

(b) (5)

BOG-- FOIA 10-251 --000518

From: William R NelsonTo: Roberto PerliSubject: Re: aigDate: 09/15/2008 09:00 AM

ok, htanks

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: 703-340-4542▼ Roberto Perli/BOARD/FRS


09/15/2008 08:52 AM


cc

Subject Re: aig

Aa3 and AA-, I don't know fitch



09/15/2008 08:28 AM

To Roberto Perli/BOARD/FRS@BOARD

cc

Subject aig

what were they rated by the three rating agencies on Friday? (long term seniorunsecured). thanks.


BOG-- FOIA 10-251 --000519

From: William R NelsonTo: Scott AlvarezSubject: Fw: aig slightly revisedDate: 09/15/2008 09:01 AMAttachments: AIG memo v4.doc

Binder1.pdf

Hi Scott, Brian asked that I send this to you.

--Bill



09/15/2008 08:47 AM


cc

Subject aig slightly revised


BOG-- FOIA 10-251 --000520

(b) (5)

BOG-- FOIA 10-251 --000521

(b) (5)

BOG-- FOIA 10-251 --000522

(b) (5)

BOG-- FOIA 10-251 --000523

(b) (5)

BOG-- FOIA 10-251 --000524

(b) (5)

BOG-- FOIA 10-251 --000525

(b) (5)

BOG-- FOIA 10-251 --000526

(b) (5)

BOG-- FOIA 10-251 --000527

(b) (5)

BOG-- FOIA 10-251 --000528

(b) (5)

BOG-- FOIA 10-251 --000529

(b) (5)

BOG-- FOIA 10-251 --000530

(b) (5)

BOG-- FOIA 10-251 --000531

(b) (5)

BOG-- FOIA 10-251 --000532










$393,170) $ 393,316 $ 397,372



Equity securities:








(2008 – $11,359; 2007 – $10,499) 43,887 41,984








2008 – $36; 2007 – $233) 33,311 31,234





Cash 2,229 2,284








$5,446) 5,692 5,518


Goodwill 10,661 9,414


Total assets $1,049,876 $1,048,361


1 BOG-- FOIA 10-251 --000533
















$8,338) 9,659 8,331





value: 2008 – $240) 6,165 4,903











2,948,038,001; 2007 – 2,751,327,476 7,370 6,878









2 BOG-- FOIA 10-251 --000534









portfolio (5,565) — (14,672) —

Other income 3,116 3,792 6,717 7,741

Total revenues 19,933 31,150 33,964 61,795








Net income (loss) $ (5,357) $ 4,277 $(13,162) $ 8,407


Diluted $ (2.06) $ 1.64 $ (5.11) $ 3.21



Diluted 2,605 2,613 2,575 2,621


3 BOG-- FOIA 10-251 --000535


Segment Results







Total $ (8,756) $ 6,328 — $(20,020) $12,500 —%






BOG-- FOIA 10-251 --000536

From: William R NelsonTo: William B English; Roberto Perli; Michael S Gibson; Jon D GreenleeSubject: Fw: aig slightly revisedDate: 09/15/2008 09:02 AMAttachments: AIG memo v4.doc

Binder1.pdf

AIG is a hot issue this morning. here is the current draft of the memo.



09/15/2008 08:47 AM


cc

Subject aig slightly revised


BOG-- FOIA 10-251 --000537

(b) (5)

BOG-- FOIA 10-251 --000538

(b) (5)

BOG-- FOIA 10-251 --000539

(b) (5)

BOG-- FOIA 10-251 --000540

(b) (5)

BOG-- FOIA 10-251 --000541

(b) (5)

BOG-- FOIA 10-251 --000542

(b) (5)

BOG-- FOIA 10-251 --000543

(b) (5)

BOG-- FOIA 10-251 --000544

(b) (5)

BOG-- FOIA 10-251 --000545

(b) (5)

BOG-- FOIA 10-251 --000546

(b) (5)

BOG-- FOIA 10-251 --000547

(b) (5)

BOG-- FOIA 10-251 --000548

(b) (5)

BOG-- FOIA 10-251 --000549










$393,170) $ 393,316 $ 397,372



Equity securities:








(2008 – $11,359; 2007 – $10,499) 43,887 41,984








2008 – $36; 2007 – $233) 33,311 31,234





Cash 2,229 2,284








$5,446) 5,692 5,518


Goodwill 10,661 9,414


Total assets $1,049,876 $1,048,361


1 BOG-- FOIA 10-251 --000550
















$8,338) 9,659 8,331





value: 2008 – $240) 6,165 4,903











2,948,038,001; 2007 – 2,751,327,476 7,370 6,878









2 BOG-- FOIA 10-251 --000551









portfolio (5,565) — (14,672) —

Other income 3,116 3,792 6,717 7,741

Total revenues 19,933 31,150 33,964 61,795








Net income (loss) $ (5,357) $ 4,277 $(13,162) $ 8,407


Diluted $ (2.06) $ 1.64 $ (5.11) $ 3.21



Diluted 2,605 2,613 2,575 2,621


3 BOG-- FOIA 10-251 --000552


Segment Results







Total $ (8,756) $ 6,328 — $(20,020) $12,500 —%






BOG-- FOIA 10-251 --000553

From: William R NelsonTo: Michael S GibsonSubject: Re: Fw: aig slightly revisedDate: 09/15/2008 09:19 AM

no. but brian may have.



09/15/2008 09:17 AM


cc

Subject Re: Fw: aig slightly revised

Have you heard anything new from NY?



09/15/2008 09:02 AM


cc

Subject Fw: aig slightly revised

Duplicate

BOG-- FOIA 10-251 --000554

From: Alejandro LaTorreTo: Gustavo A SuarezCc: Daniel M Covitz; Gustavo A Suarez; JNellie LiangSubject: Re: AIG commercial paper outstandingsDate: 09/15/2008 09:19 AM

Thanks for this. Info on maturity profile would be valuable too if available. Also wewould like to get similar info for Thanks again for the quickturnaround. ▼ Gustavo A Suarez/BOARD/FRS@BOARD

Gustavo ASuarez/BOARD/FRS@BOARD

09/15/2008 09:11 AM

To Alejandro LaTorre/NY/FRS@FRS

cc Daniel M Covitz/BOARD/FRS@BOARD, JNellieLiang/BOARD/FRS@BOARD, Gustavo ASuarez/BOARD/FRS@BOARD


Alejandro,

Please find attached some data on unsecured commercial paper outstanding andyields for AIG Funding Inc. AIG also sponsors two ABCP programs, and an affiliateof AIG sponsored an SIV not included in the file. The two ABCP programs and theSIV combine for less commercial paper outstanding than AIG itself. We will try toget 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


09/14/2008 09:26 PM

To JNellie Liang/BOARD/FRS@BOARD

cc Daniel M Covitz/BOARD/FRS@BOARD, Gustavo ASuarez/BOARD/FRS@BOARD, JNellieLiang/BOARD/FRS@BOARD


(b) (5)

Duplicate

BOG-- FOIA 10-251 --000555

From: Diane Fraser@frb govTo: [email protected]; Bart.S [email protected]; [email protected]; [email protected]: [email protected]: AIG shares drop n premarket tradingDate: 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'sputting 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 "awide 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 largemortgage 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


BOG-- FOIA 10-251 --000556

From: [email protected]: [email protected]: [email protected]; [email protected]; [email protected]; [email protected]: Re: AIG shares drop in premarket tradingDate: 09/15/2008 10:04 AM

On the news just now - AIG to announce its restructuring plan this morning.

Cynthia MartinFederal Reserve Bank of Boston600 Atlantic AvenueBoston, MA 02210

617 973-3178 (office)617 619-8478 (fax)

BOG-- FOIA 10-251 --000557

From: William R NelsonTo: Patricia MosserSubject: Any news on an aig deal?Date: 09/15/2008 10:11 AM

Email: [email protected]: 202-452-3579Mobile: 202-725-3612

BOG-- FOIA 10-251 --000558

From: Jon D GreenleeTo: Sabeth I Siddique; James Embersit; Nina Nichols; Adrienne HadenSubject: Fw: DB Clearing & Settlement update #2Date: 09/15/2008 10:11 AM

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962----- Forwarded by Jon D Greenlee/BOARD/FRS on 09/15/2008 10:10 AM -----

JohnHarvey/NY/FRS@FRS

09/15/2008 09:30 AM

To NY Bank Sup - LFI CPC Updates@FRS

cc Christopher Hunter/NY/FRS@FRS

Subject DB Clearing & Settlement update #2

Please note the following update from Tom Devine, Director – Global Markets at 8:45 am.

AIG

Not Responsive

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

Not Responsive

BOG-- FOIA 10-251 --000559

From: Jon D GreenleeTo: Deborah P Bailey; Betsy Cross; Sabeth I Siddique; James Embersit; Adrienne Haden; Nina NicholsSubject: Fw: counterparty discussion.Date: 09/15/2008 10:22 AM


RichardWesterkamp/RICH/FRS@FRS

09/15/2008 10:17 AM

To Barbara Yelcich/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, CarolineFrawley/NY/FRS@FRS, ChrisHaley/BOS/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, DeborahLohnau/NY/FRS@FRS, JamesWall/NY/FRS@FRS, JaneWakefield/NY/FRS@FRS, JenniferBurns/RICH/FRS@FRS, JohnHarvey/NY/FRS@FRS, JohnRuocco/NY/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD, KarenKahrs/NY/FRS@FRS, Lisa AWhite/RICH/FRS@FRS, LisaJoniaux/NY/FRS@FRS, MichaelJohnson/SF/FRS@FRS, Raymond ABacon/BSR/CHI/FRS@FRS, RichardWesterkamp/RICH/FRS@FRS, SarahDahlgren/NY/FRS@FRS, StanleyPoszywak/RICH/FRS@FRS, StephanieChaly/NY/FRS@FRS, Steven JManzari/NY/FRS@FRS, TheresaBarry/BOS/FRS@FRS, ToddWaszkelewicz/NY/FRS@FRS, Wendy EKallery/BSR/CHI/FRS@FRS, PhilipAquilino/SF/FRS@FRS

cc [email protected], MacAlfriend/RICH/FRS@FRS, RyanRehorn/RICH/FRS@FRS, WarrenMorris/RICH/FRS@FRS, StanleyPoszywak/RICH/FRS@FRS, ElizabethGress/RICH/FRS@FRS, RonFox/RICH/FRS@FRS, Gregory HFeldberg/BOARD/FRS@BOARD

Subject counterparty discussion.

BOG-- FOIA 10-251 --000560

Date: DATE \@ "MMMM d, yyyy" September 15, 2008

To: Files

From: Ryan Rehorn

Subject: 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: Jon D GreenleeTo: Sabeth I Siddique; Adrienne Haden; James Embersit; Nina Nichols; Deborah P BaileySubject: Fw: BAC - Counterparty Credit Update - Restricted FR (highly sensitive)Date: 09/15/2008 10:26 AMAttachments: AIG 080912 xls


BradEvans/RICH/FRS@FRS

09/15/2008 10:22 AM

To Barbara Yelcich/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS,Chris Haley/BOS/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, DeborahLohnau/NY/FRS@FRS, James Wall/NY/FRS@FRS, JaneWakefield/NY/FRS@FRS, JenniferBurns/RICH/FRS@FRS, John Harvey/NY/FRS@FRS,John Ruocco/NY/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD, KarenKahrs/NY/FRS@FRS, Lisa A White/RICH/FRS@FRS,Lisa Joniaux/NY/FRS@FRS, MichaelJohnson/SF/FRS@FRS, Philip Aquilino/SF/FRS@FRS,Raymond A Bacon/BSR/CHI/FRS@FRS, RichardWesterkamp/RICH/FRS@FRS, SarahDahlgren/NY/FRS@FRS, StanleyPoszywak/RICH/FRS@FRS, StephanieChaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS,Theresa Barry/BOS/FRS@FRS, ToddWaszkelewicz/NY/FRS@FRS, Wendy EKallery/BSR/CHI/FRS@FRS

cc Jennifer Burns/RICH/FRS@FRS, Lisa AWhite/RICH/FRS@FRS, KarenCraigmile/RICH/FRS@FRS, FrankMayhew/RICH/FRS@FRS, KerriFirestone/RICH/FRS@FRS, Alan Michael, JodieGoff/RICH/FRS@FRS, David Schwartz/RICH/FRS@FRS,Christopher Cook/RICH/FRS@FRS, Stacy LColeman/RICH/FRS@FRS, DianneDobbeck/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS,Kyle Grieser/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS,Mac Alfriend/RICH/FRS@FRS

Subject BAC - Counterparty Credit Update - Restricted FR(highly sensitive)

Please find attached BAC's tear sheet data for "heightened monitoring" counterpartyexposures.

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

Not Responsive

BOG-- FOIA 10-251 --000564

Best Regards,

Brad Evans & Kerri FirestoneFederal Reserve

"There cannot be a crisis next week. My schedule is already full."

Henry Kissinger

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

Not Responsive

Not Responsive

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 Wi l am R NelsonTo at ic a Mos eSubject Re Any news on an a g deal?Date 09/15/2008 10 31 AM

Thanks.Ema l [email protected] 202- 52-3579Mobile 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 [email protected]

09 5 2008 0 4 AM o " at c a Mosse "

< at icia Mosse @ny b o g>

cc

Sub ect Any news on an aig deal?

Email william r nelson@frb govOffice 202-452-3579Mobile 202-725-3612

BOG-- FOIA 10-251 --000611

From: Kim JensikTo: Adrienne Haden; Nina Nichols; Sabeth I SiddiqueSubject: 10:30 call infoDate: 09/15/2008 10:41 AMImportance: High

As per Dianne Dobbeck: A conf. call meeting to discuss AIG & knock-on to other institutionshas been scheduled for today:

Date: Sept. 15, 2008Time: 10:30amLocation: 25th Floor Southeast Conf. Call.

Teleconference info: Dial: 877 810 9415Participant: 4169466

Host: 2975

Senior Staff AssistantBS&R Div, Federal Reserve BoardPhone: 202/736-5555Fax: 202/452-2770

BOG-- FOIA 10-251 --000612

From: Calvin MitchellTo: Michelle A SmithSubject: Re:Date: 09/15/2008 10:47 AM

When you're done.At 11:30 am, we're hosting, along with NYS insurance superintendent and TRSreps (no Paulson), a group to discuss the situation re AIG. At the requestof AIG and an industry consortium, we are providing premises to discusstheir situation.TFG said I can confirm on background once underway.

----- Original Message -----From: Michelle A SmithSent: 09/15/2008 10:38 AM EDTTo: Calvin MitchellSubject: Re:

We're in our board mtg. Shd I step out?

----- Original Message -----From: Calvin.MitchellSent: 09/15/2008 10:40 AM ASTTo: Michelle Smith

Call me in TFG's office please. Thx.

BOG-- FOIA 10-251 --000613

From: Michelle A SmithTo: Donald L Kohn; Kevin Warsh; Brian F Madigan; Scott AlvarezSubject: AIG mtg at FRBNYDate: 09/15/2008 10:50 AM

----- Original Message -----From: Calvin MitchellSent: 09/15/2008 10:50 AM EDTTo: Michelle SmithSubject: Re:


(b) (6)

Duplicate

BOG-- FOIA 10-251 --000614

From: Coryann StefanssonTo: Diann Townsend; Kwayne JenningsCc: Ron FeldmanSubject: Re: AIG and WamuDate: 09/15/2008 11:01 AM

Coryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # 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

Please let me know if you'd like any additional information.

Diann TownsendSupervision, Regulation, and CreditFederal Reserve Bank of Minneapolis612-204-6130

(

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

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

BOG-- FOIA 10-251 --000615

From: Kevin WarshTo: Patrick ParkinsonSubject: Fw: AIG mtg at FRBNYDate: 09/15/2008 11:02 AM

May be goof for u to attend----------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message -----From: Michelle A SmithSent 0:50 AM EDTTo: Donald Kohn; Kevin Warsh; Brian Madigan; Scott AlvarezSubj t FRBNY



(b) (6)

Duplicate

BOG-- FOIA 10-251 --000616

From: Patrick M ParkinsonTo: Kevin WarshSubject: Re: AIG mtg at FRBNYDate: 09/15/2008 11:05 AM

I haven't been invited and will lay low. Pat

----- Original Message -----From: Kevin.WarshSent: 09/15/2008 11:02 AM ASTTo: Patrick ParkinsonSubject: Fw: AIG mtg at FRBNY

May be goof for u to attend----------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message -----From: Michelle A SmithSent 0:50 AM EDTTo: Donald Kohn; Kevin Warsh; Brian Madigan; Scott AlvarezSubj t FRBNY



----- Original Message -----From: Michelle A SmithSent: 09/15/2008 10:38 AM EDTTo: Calvin MitchellSubject: Re:

We're in our board mtg. Shd I step out?

----- Original Message -----From: Calvin.MitchellSent: 09/15/2008 10:40 AM AST

(b) (6)

BOG-- FOIA 10-251 --000617

From: Meredith J BeecheyTo: MA FMA EventstudyCc: Steve A SharpeSubject: Early reaction to the weekend's eventsDate: 09/15/2008 11:07 AMAttachments: earlytable.pdf

Attached is a table summarizing the market reaction between close of businessFriday and open on Monday to the weekend's events, including:

- Lehman's bankruptcy, the purchase of Merril Lynch by Bank of America, andreported difficulties at AIG, - the announcement on Sunday of enhancements of the Federal Reserve's liquidityfacilities, and - a joint statement by a consortium of major banks creating a liquidity pool forparticipant borrowing.

Rates on interest rate futures declined sharply at all maturities and nominal Treasuryyields were also sharply lower. The two year yield was down 38 basis points, theten-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 Monday Early5-Sep-2008 15-Sep-08 Change

5:00 PM 08:05 AM(1) (2) (2)-(1)

Treasury Coupon Yields basis pointsTwo-Year 2.22 1.84 -37.5Five-Year 2.95 2.63 -32.3Ten-Year 3.72 3.52 -19.5

Equity Prices percent changeS&P 500* 1251.7 1239.7 -1.0S&P Futures 1258.5 1209.7 -3.9

TIPS basis pointsFive-Year 1.46 1.29 -16.4Ten-Year 1.77 1.65 -12.0

Fed Funds Futures basis pointsOct 1.97 1.81 -16.5Nov 1.93 1.75 -17.5Dec 1.91 1.69 -22.0Jan 1.92 1.67 -25.0

Eurodollar Futures basis pointsS-08 2.82 2.82 -0.1D-08 2.93 2.70 -23.5M-09 2.82 2.49 -32.5J-09 2.92 2.57 -34.5S-09 3.08 2.74 -34.0

Libor OIS Spreads basis pointsOne-month 53.09 71.81 18.73Three-Month 86.33 105.13 18.80Six-Month 105.43 137.59 32.16

CDS* basis pointsiTraxx (Europe) 102.86 130.22 27.36CDX (US) 151.69 NA NA

F/X Quotes percent changeYen/Dollar 107.9870 105.6820 -2.1Dollar/Euro 1.4209 1.4126 -0.6

* Mkt open 9:30am** Observation at 9:15am

BOG-- FOIA 10-251 --000619

From: [email protected]: [email protected]: Re: trying to reach you... (sorry)Date: 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 torespond to the fast-evolving financial crisis in the first instance, ratherthan 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 wonderedif this was the result of being exhausted after a mad weekend or a fairreflection of the stance at this juncture.K

[email protected]/15/2008 11:08 "Krishna Guha"AM <[email protected]>

cc

SubjectRe: trying to reach you... (sorry)

Am in our board mtg.Want to talk by email?

----- Original Message -----From: Krishna.GuhaSent: 09/15/2008 11:09 AM ASTTo: Michelle SmithSubject: trying to reach you... (sorry)

**********************************************************************************

This email may contain confidential material. If you were not an intendedrecipient, please notify the sender and delete all copies. We may monitoremail 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 2785371 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 RoadCentral, 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 intendedrecipient, please notify the sender and delete all copies. We may monitoremail 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 2785371 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 RoadCentral, 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: Thomas J O'KeeffeTo: 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; DeniseGoodstein; Dennis Herbst; Dennis Ryan; Dianne Dobbeck; Dmitry J Gershik; Elizabeth Gress; Elizabeth Tafone;Gail Santora; [email protected]; Gerard Dages; Glen Reppy; Gretchen Cappiello; GretchenWalker; H Clay Saylor; Hasan Latif; Hayley Boesky; Homer Hill; Isabella Lo Piccolo; Jack Jennings; JamesEmbersit; James Hodgetts; James Wall; Jan Voigts; Jane Green; Jane Majeski; Jane Wakefield; JeanmarieDavis; Jeffrey Kowalak; Jeffrey Levine; Jeffrey Plaskett; Jim Mahoney; Joanna Wisniecka; John Beebe; JohnHeinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith JGruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kerry STREETS; KevinClarke; 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 LKwast; 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; RalphSantasiero; Randolph Brown; Renuka Vijayanathan; Richard Heeseler; Richard Kunen; Richard Naylor; RichardRoberts; Richard Westerkamp; Rick Weaver; Robert D Patalano; Robert Gutierrez; Roberto Perli; RogerGraham; Rohit Bansal; Ron Fox; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren;[email protected]; Stanley Poszywak; Stephanie Chaly; Steven Friedman; Steven J Manzari; StevenMirsky; Susan G Ballinger; Susan Goldberg; Terrence Checki; Theodore Lubke; Theonilla Lee-Chan; TheresaBarry; Thomas Dolan; Thomas J O'Keeffe; [email protected]; Todd Waszkelewicz; Wendy Ng; William BEnglish; William BRODOWS; William Rutledge; Wing Oon

Cc: Bin Lang; Brian Hefferle; Caroline Nuffort; Isabella Lo Piccolo; Joanna Wisniecka; Joshua Sherwin; KathrynChen; Kenton Beerman; Mayra Gonzalez; Randolph Brown; Susan G Ballinger; Susan Goldberg; Thomas JO'Keeffe

Subject: AM Liquidity UpdateDate: 09/15/2008 11:25 AMImportance: High

Restricted F.R.

AM Liquidity Team Update:(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000622

************************************************Thomas J. O'Keeffe, CFABank SupervisionFederal Reserve Bank of New York(212)720-5568***********************************************

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

BOG-- FOIA 10-251 --000623

From: Jon D GreenleeTo: William R NelsonCc: Michael S Gibson; Roberto Perli; William B EnglishSubject: Re: Fw: aig slightly revisedDate: 09/15/2008 11:27 AM

Let me know how we may help.

Jon

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ William R Nelson/BOARD/FRS


09/15/2008 09:02 AM


cc


Duplicate

BOG-- FOIA 10-251 --000624

From: Scott AlvarezTo: William R NelsonSubject: Re: Fw: aig slightly revisedDate: 09/15/2008 11:36 AM

Bill,

Scott



09/15/2008 09:01 AM


cc


(b) (5)

Duplicate

BOG-- FOIA 10-251 --000625

From: Michael S GibsonTo: Gustavo A SuarezSubject: AIG corporate structureDate: 09/15/2008 12:14 PMAttachments: aig-corporate-structure.pdf

BOG-- FOIA 10-251 --000626

SNL Interactive: Briefing Book: Corporate Structure http://www.snl.com/interactivex/ParentSubTree.aspx?ResetDefaults=1...

1 of 9 9/15/2008 12:13 PM

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(b) (4)

BOG-- FOIA 10-251 --000635

From: Jill K CetinaTo: RBOPS PAYMENT SYSTEM RISK; RBOPS CSSCc: Donald Hammond; Gregory L EvansSubject: Fw: WSJ.com - AIG Scrambles to Raise Cash, Talks to FedDate: 09/15/2008 12:14 PM

Note that AIG is reported to have some VERY large CDS positions -- with Europeanbanks as counterparties.

----- Forwarded by Jill K Cetina/BOARD/FRS on 09/15/2008 12:06 PM -----

[email protected]

09/15/2008 12:05 PM


cc

Subject WSJ.com - AIG Scrambles to Raise Cash, Talks to Fed

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WSJ.com - AIG Scrambles to Raise Cash, Talks to Fed* This article will be available to non-subscribers of theOnline Journal for up to seven days after it is e-mailed.

BOG-- FOIA 10-251 --000636

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*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: [email protected]: You are probably busy, but....Date: 09/15/2008 12:18 PM

You said the last time we spoke to touch base if I ever have concerns...

The lack of a resolution on AIG keeps markets unsettled.Money funds (fortunately not us) could see their NAVs at risk due to themarkdown to zero of their Lehman holdings.Market talk about who is next.

You probably can't say...but are you hearing of any money funds indistress due to their holdings, or ancillary price pressures?My opinion is that the Fed should be considering "emergency easing" iffor no other reason to alleviate pricing in the money markets and morespecifically to protect from potential "breaking the buck" on the partof some money funds out there.The Fed could cut rates and wrap "emergency" and "temporary" languagearound the move to communicate that such a move is designed to givemarkets a chance to catch its breath.

Just my thoughts.

(b)(4) &

(b) (6)

(b) (4)

BOG-- FOIA 10-251 --000638

From: Diane FraserTo: Sabeth I Siddique; James Embersit; Nina NicholsCc: Barbara Cornyn; [email protected]; Donald N Gabbai; David K Lynch; Craig F MarchbanksSubject: Fw: Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIGDate: 09/15/2008 12:21 PMAttachments: 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 -----

[email protected]

09/14/2008 10:09 PM


cc [email protected], [email protected]

Subject Notes from 9/14/08 conf. call w/ New York StateInsurance 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

1

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)

BOG-- FOIA 10-251 --000640

RESTRICTED FR

2

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

BOG-- FOIA 10-251 --000641

RESTRICTED FR

3

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

BOG-- FOIA 10-251 --000642

RESTRICTED FR

4

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

BOG-- FOIA 10-251 --000643

From: Antonio AlvarezTo: NY Bank Sup - LFI CPC UpdatesCc: 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; CalvinBailey; Timothy Sheridan; Christina Zausner; Steven J Manzari

Subject: Citi Counterparty Update 9-15-08 AMDate: 09/15/2008 12:25 PM

Mid Morning Discussions Tom Fontana, FIs Risk Management), and OCC.

AIG Exposure

Not Responsive

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

BOG-- FOIA 10-251 --000644

We expect to get Wachovia exposure during our next update later in the day/evening.

Regards,

----------------------------------------------------Antonio AlvarezCredit Risk Coordinator - WholesaleCitigroup Continuous Monitoring TeamFederal Reserve Bank of New YorkCitigroup On-site: (212) 527-1255; FRBNY Voicemail: (212) 720-5069Blackberry: (718) 612-3095

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

BOG-- FOIA 10-251 --000645

From: Nina NicholsTo: Karen L El KochtaSubject: Fw: Notes from 9/14/08 conf. call w/ New York State Insurance Dept. Superintendent Dinallo re: AIGDate: 09/15/2008 12:26 PMAttachments: 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 -----

DianeFraser/BOARD/FRS

09/15/2008 12:21 PM

To Sabeth I Siddique/BOARD/FRS@BOARD, JamesEmbersit/BOARD/FRS@BOARD, NinaNichols/BOARD/FRS

cc Barbara Cornyn/BOARD/FRS@BOARD,[email protected], Donald NGabbai/BOARD/FRS@BOARD, David KLynch/BOARD/FRS@BOARD, Craig FMarchbanks/BOARD/FRS@BOARD

Subject Fw: Notes from 9/14/08 conf. call w/ New York StateInsurance Dept. Superintendent Dinallo re: AIG

FYI.----- Forwarded by Diane Fraser/BOARD/FRS on 09/15/2008 12:19 PM -----

[email protected]

09/14/2008 10:09 PM


cc [email protected], [email protected]

Subject Notes from 9/14/08 conf. call w/ New York StateInsurance Dept. Superintendent Dinallo re: AIG

Duplicate

BOG-- FOIA 10-251 --000646

From: Deborah P BaileyTo: Donald L Kohn; Randall S Kroszner; Elizabeth A DukeCc: [email protected]; Coryann Stefansson; Jack Jennings; Jon D Greenlee; Jeffrey Marquardt; Jeff Stehm; Brian F

Madigan; Norah BargerSubject: Fw: MARKETS, HOURLY UPDATE, Monday 15 September 2008, 16.30 MEAT attachedDate: 09/15/2008 12:30 PMAttachments: MEAT 15 September 2008 1630.pdf

FYI. Update from the UK. We have multiple information streams underway. If you findthis 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 -----

[email protected]

09/15/2008 12:21 PM

To [email protected],[email protected], [email protected],[email protected], [email protected],[email protected], [email protected],[email protected]

cc

Subject Fw: MARKETS, HOURLY UPDATE, Monday 15 September2008, 16.30 MEAT attached

FYI. ----- Forwarded by William Rutledge/NY/FRS on 09/15/2008 12:20 PM ----- "Thomas Huertas"<[email protected]>

09/15/2008 12:21 PM To <[email protected]> cc <[email protected]>

Subject FW: MARKETS, HOURLY UPDATE, Monday 15 September 2008, 16.30MEAT attached

FYI. -----Original Message-----From: Cope, Philip [mailto:[email protected]] Sent: 15 September 2008 17:01To: Market News; FSA & HMT Markets updatesSubject: 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 PMTo: 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 maybe subject to legal privilege. It is for intended recipients only. If you are not the intendedrecipient you must not copy, distribute, publish, rely on or otherwise use it without ourconsent. Some of our communications may contain confidential information which it could bea criminal offence for you to disclose or use without authority. If you have received this emailin error please notify [email protected] immediately and delete the email from yourcomputer.

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This email is not intended to nor should it be taken to create any legal relations orcontractual relationships. This email has originated from

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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: Jon D GreenleeTo: William B English; William R Nelson; Michael S GibsonSubject: Fw: UBS Counterparty call with D.Bawden - NotesDate: 09/15/2008 12:34 PMAttachments: LEH calls 9-15 - 10am cntrprty Minutes.doc

The color on AIG might provide some insights into how the market views the firm.


Paul HAustin/NY/FRS@FRS

09/15/2008 12:31 PM

To Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS,Andrew Small/NY/FRS@FRS, AnthonyCirillo/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS, BardStermasi/NY/FRS@FRS, Brandon Hall/NY/FRS@FRS,Brian Begalle/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, Bridget Habib/NY/FRS@FRS,Caroline Nuffort/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS,Christina Zausner/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS,Clinton Lively/NY/FRS@FRS, CorbinLong/NY/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, CraigLeiby/NY/FRS@FRS, Daniel Muccia/NY/FRS@FRS,Deborah Lohnau/NY/FRS@FRS, DexterWilliams/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, JamesHodgetts/NY/FRS@FRS, Jan Voigts/NY/FRS@FRS,Jeanmarie Davis/NY/FRS@FRS, JeffreyLevine/NY/FRS@FRS, Jennifer Burns/RICH/FRS@FRS,Jim Mahoney/NY/FRS@FRS, JohnBeebe/RICH/FRS@FRS, John Heinze/NY/FRS@FRS,John Ricketti/NY/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD, JonathanPolk/NY/FRS@FRS, Jordan Pollinger/NY/FRS@FRS,Joseph Galati/NY/FRS@FRS, Judith JGruttman/NY/FRS@FRS, Kara Sulmasy/NY/FRS@FRS,Karen Kahrs/NY/FRS@FRS, Katheryn Van derCelen/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, LaxmiRao/NY/FRS@FRS, Lucinda M Brickler/NY/FRS@FRS,Luis Uranga/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS,Michael Johnson/SF/FRS@FRS, PaulWhynott/NY/FRS@FRS, Randolph Brown/NY/FRS@FRS,Richard Kunen/NY/FRS@FRS, RichardMcGee/NY/FRS@FRS, Robert Gutierrez/NY/FRS@FRS,Roger Graham/NY/FRS@FRS, RonaldStroz/NY/FRS@FRS, Sandy Krieger/NY/FRS@FRS,Sarah Dahlgren/NY/FRS@FRS, StephanieChaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS,Steven Mirsky/NY/FRS@FRS, Susan GBallinger/NY/FRS@FRS, Susan Goldberg/NY/FRS@FRS,Theodore Lubke/NY/FRS@FRS, Theonilla Lee-Chan/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, WilliamHallacy/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, PaulBhatti/NY/FRS, [email protected]

cc

Subject UBS Counterparty call with D.Bawden - Notes

Regards,Paul

Paul AustinSenior Bank ExaminerBank SupervisionFederal Reserve Bank of New [email protected]

BOG-- FOIA 10-251 --000655

1

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

Not Responsive

BOG-- FOIA 10-251 --000656

2

Not Responsive

BOG-- FOIA 10-251 --000657

From: John ReynoldsTo: William Hallacy; NY Bank Sup - LFI CPC Updates@FRSCc: [email protected]; [email protected]; Andrew Small; John Reynolds; Paul Bhatti;

Christopher Powell; Betsy Gordon; Jordan Pollinger; Paul H AustinSubject: UBS follow-up -- Counterparty MonitoringDate: 09/15/2008 12:35 PM

In our conversation with UBS folks in London around the time of London's openingUBS mentioned a few institutions that are concerned with.

AIG,

John Reynolds▼ William Hallacy/NY/FRS

WilliamHallacy/NY/FRS

09/15/2008 12:01 PM

To NY BankSup New York CPC, AntonioAlvarez/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS,Moses Cheng/NY/FRS@FRS, KathleenSmalligan/NY/FRS@FRS, Yogesh Shah/NY/FRS@FRS,Carol Roller/NY/FRS@FRS, CarolineFrawley/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS,John Ricketti/NY/FRS@FRS

cc Steven Mirsky/NY/FRS@FRS, DexterWilliams/NY/FRS@FRS, Bridget Habib/NY/FRS@FRS,Jordan Pollinger/NY/FRS@FRS, KyleGrieser/NY/FRS@FRS, Dianne Dobbeck/NY/FRS@FRS

Subject Counterparty Monitoring

CPC Teams(b) (8)

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

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

BOG-- FOIA 10-251 --000658

Thanks and keep up the good work --

William Hallacy, CFAFederal Reserve Bank of New YorkFed 212-720-2776Citi 212-583-7104

BOG-- FOIA 10-251 --000659

From: Jon D GreenleeTo: William B English; William R Nelson; Michael S GibsonSubject: Fw: Citi Counterparty Update 9-15-08 AMDate: 09/15/2008 12:37 PM

More insight on AIG below.


AntonioAlvarez/NY/FRS@FRS

09/15/2008 12:25 PM

To NY Bank Sup - LFI CPC Updates

cc William Hilton/NY/FRS@FRS, LouisBraunstein/NY/FRS@FRS, WilliamHallacy/NY/FRS@FRS, Glen Snajder/NY/FRS@FRS,Rinku Shah/NY/FRS@FRS, John Ruocco/NY/FRS@FRS,Eric Breitweiser/NY/FRS@FRS, AnneChiou/NY/FRS@FRS, Sara Mahmoud/NY/FRS@FRS,Jacqueline Lovisa/NY/FRS@FRS, SolaMajolagbe/NY/FRS@FRS, Glen Reppy/NY/FRS@FRS,Katheryn Van der Celen/NY/FRS@FRS, CalvinBailey/NY/FRS@FRS, Timothy Sheridan/NY/FRS@FRS,Christina Zausner, Steven J Manzari/NY/FRS@FRS

Subject Citi Counterparty Update 9-15-08 AM

Mid Morning Discussions Tom Fontana, FIs Risk Management), and OCC.Duplicate

BOG-- FOIA 10-251 --000660

From: Jon D GreenleeTo: Sabeth I Siddique; James Embersit; Nina Nichols; Adrienne HadenSubject: Fw: UBS follow-up -- Counterparty MonitoringDate: 09/15/2008 12:37 PM

fyi


JohnReynolds/NY/FRS@FRS

09/15/2008 12:35 PM

To William Hallacy/NY/FRS@FRS, NY Bank Sup - LFI CPCUpdates@FRS

cc [email protected],[email protected], AndrewSmall/NY/FRS@FRS, John Reynolds/NY/FRS@FRS,Paul Bhatti/NY/FRS@FRS, Christopher Powell/NY/FRS,Betsy Gordon/NY/FRS@FRS, JordanPollinger/NY/FRS@FRS, Paul H Austin/NY/FRS@FRS

Subject UBS follow-up -- Counterparty Monitoring

In our conversation with UBS folks in London around the time of London's openingUBS mentioned a few institutions that are concerned with.

Duplicate

BOG-- FOIA 10-251 --000661

From: Holly A KirkpatrickTo: Danielle E LittleSubject: AIGDate: 09/15/2008 12:50 PMAttachments: AIG.xls

BOG-- FOIA 10-251 --000662

(b) (4)

BOG-- FOIA 10-251 --000663

From: Moses ChengTo: 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 FMarchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Denise Goodstein; Dennis Ryan; Dexter Williams;Diane Rose; Dianne Dobbeck; [email protected]; Gretchen Cappiello; H Clay Saylor; HelenMucciolo; 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; JohnRicketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; Jyoti Kohli; KaraSulmasy; Karen Kahrs; Katheryn Van der Celen; Kevin Clarke; Kevin Lee; Kirsten Harlow; Kyle Grieser; LanceAuer; 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 LKwast; 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; RonaldStroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren; [email protected]; 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; [email protected]; Todd Waszkelewicz; Wendy Ng;William BRODOWS; William Hallacy; Wing Oon

Cc: Richard Kunen; Pat Soriano; John Harvey; Taitu Wondwosen; Paula Premo; Peter DeMontravel; Om Arya; JaneWakefield; Jordan Pollinger

Subject: DB September 15, 2008 Credit Risk Management Morning UpdateDate: 09/15/2008 01:03 PM

**Restricted FR**

Prepared by Moses Cheng and Tai Wondwosen

Brief Update on Credit with CRM for DB:

*************************************Moses Cheng, CFA, FRMFederal Reserve Bank of New York212-720-1433

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

BOG-- FOIA 10-251 --000664

212-250-6075

BOG-- FOIA 10-251 --000665

From: Patrick E McCabeTo: Patrick DwyerSubject: Money fund issuesDate: 09/15/2008 01:05 PM

Patrick:

Just got a note from , who's concerned about MMF exposure toAIG and Lehman -- not for , but for others. Have you heard any word aboutMMFs with NAV problems?

-Patrick

(b) (4)(b) (4)

BOG-- FOIA 10-251 --000666

From: James EmbersitTo: Jon D GreenleeCc: Adrienne Haden; Nina Nichols; Sabeth I SiddiqueSubject: Brainstorming meetingDate: 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:

That's all for now.

Adrian, Nina, sabeth - feel free to correct me if I got anything wrong or missedsomething.

Jim Embersitoffice - 202-452-5249cell-202-528-7884-Jim Embersit202-452-5249-------------------------

(b) (5)

BOG-- FOIA 10-251 --000667


BOG-- FOIA 10-251 --000668

From: Dianne DobbeckTo: 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; RichardCahill; Steven Mirsky; Kyle Grieser; William Hallacy; Bard Stermasi; Paul Whynott; Catherine Voigts; AlejandroLaTorre; Beverly Hirtle; Til Schuermann; Judith J Gruttman; [email protected]; Kevin Clarke; Jennifer L.Hicks; Wilma Sabado; Jennifer Brett; Summer Cole; Jon D Greenlee; James Embersit; Sabeth I Siddique;Coryann Stefansson; Kevin Coffey

Cc: Arthur Angulo; Sarah Dahlgren; Meg McConnell; Adam AshcraftSubject: AIG & Identifying other firms under stressDate: 09/15/2008 01:08 PM

As a follow-up to our discussion this morning, below is a quick outline for movingforward. For those of you that were not able to attend the meeting due toscheduling conflicts, we spoke about three efforts -- the most immediate of whichrelate to dimensioning risks posed by AIG. The other two streams are intended to(a) identify other non-bank intermediaries of potential concern, and (b) potentialweaknesses at banks (with emphasis on regional and smaller foreigns). The pointsfor each stream are identified below. Additionally, we'll look to have a preliminaryview on all three workstreams toward the end of today with analysis to continuethroughout the week.

(b) (5)

BOG-- FOIA 10-251 --000669

From: Jon D GreenleeTo: William B English; William R Nelson; Michael S GibsonSubject: Fw: AIG gets New York's help in accessing $20 billionDate: 09/15/2008 01:23 PM

In case you haven't seen this.


DianeFraser/BOARD/FRS

09/15/2008 01:20 PM

To Jon D Greenlee/BOARD/FRS@BOARD, AdrienneHaden/BOARD/FRS@BOARD, JamesEmbersit/BOARD/FRS@BOARD, NinaNichols/BOARD/FRS, Sabeth ISiddique/BOARD/FRS@BOARD

cc [email protected], Elise Liebers/NY/FRS@FRS

Subject 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 officialshad reached an agreement with American International Group Inc that allows the insureraccess 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 theparent company.

AIG had worked with New York officials through the weekend to shore up capital afterrating agencies threatened downgrades. AIG's shares were down 55.6% at $5.39 afterearlier touching $3.50.

The company has posted $18 billion in cumulative losses over the past three quarters onguarantees 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 wascarefully crafted to pose no risk to New York taxpayers.

New York Insurance Superintendent Eric Dinallo is appealing to the federal government onAIG's behalf to provide it additional access to capital, Gov. Paterson said.


BOG-- FOIA 10-251 --000671

From: Danielle E LittleTo: Jeffrey Marquardt; RBOPS PAYMENT SYSTEM RISK; Jeff StehmSubject: AIG FSB informationDate: 09/15/2008 01:32 PMAttachments: AIG.xls

AIG FSB 20080912.pdf

Good afternoon,

Please find attached an Excel worksheet with attribute data of AIG's federal savingsbank (AIG FSB) including cap class, asset, collateral, and overdrafting information.

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 LittleFederal Reserve [email protected]

(b) (4)

BOG-- FOIA 10-251 --000672

(b) (4)

BOG-- FOIA 10-251 --000673

(b) (4)

BOG-- FOIA 10-251 --000674

From:To: [email protected]: Well lets see what we have hereDate: 09/15/2008 01:37 PM

Market reacted better so far--but much of what we saw today was clientscoming to us to deal with re-assignment of trades they had on withLehman. Process is going forward---see below as I find thisamazing--why does the FED need Morgan Stanley to assess options in thecase 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 theaction taken personally was the right one.

13:24 15Sep08 RTRS-MORGAN STANLEY <MS.N> HIRED BY FEDERAL RESERVE TOREVIEW OPTIONS REGARDING AIG <AIG.N> - SOURCE13:25 15Sep08 RTRS-MORGAN STANLEY <MS.N> WILL REVIEW FED'S OPTIONS, WHATSYSTEMIC RISK FROM AIG AIG.N> - SOURCE13:26 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 13:24:13RTRS [nWEN8079] {EN}ENDS

(b) (4)

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000675

From: John HarveyTo: NY Bank Sup - LFI CPC Updates@FRSCc: Christopher HunterSubject: DB Clearing & Settlement update #3 - Final or today (9/15/08)Date: 09/15/2008 01:45 PM

Please note the following update from Tom Devine, Director – Global Markets at 8:45am.

Our next meeting with Mr. Devine will be tomorrow morning at 7am.

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

BOG-- FOIA 10-251 --000676

From: Gustavo A SuarezTo: Patrick M Parkinson; JNellie Liang; Daniel M CovitzSubject: Fw: CP Market Update:Date: 09/15/2008 01:51 PM


09/15/2008 01:45 PM

To <[email protected]>,<[email protected]>,<[email protected]>,<[email protected]>

cc

Subject CP Market Update:

This was not a good day for CP. Liquidity was very poor. Think investorparking in Tbills and Treasuries, we only saw half the normal flows. Very toughgauging levels for issuer, traded between 1.5% an 8%. Bottom Line very verydifficult market conditions today in CP and in Repo for RP outside GovtCollateral. Spent my morning fending off many many buyback bids wantedfrom investors on GECC CP and Aig CP.

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000677

From: Coryann StefanssonTo: [email protected]: BSR LIG; Betsy CrossSubject: Leh, aig etcDate: 09/15/2008 02:16 PM

Please keep an eye out for

Coryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # 202 294 9829

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

BOG-- FOIA 10-251 --000678

From: Coryann StefanssonTo: Brian Peters; Betsy Cross; Kevin BertschCc: Sarah DahlgrenSubject: Re: Fw: AIG & Identifying other firms under stressDate: 09/15/2008 02:20 PM

I think the risk report can inform you regarding the exposures within the portfolioand I know that we are doing liquidity monitoring across the board

We will let you know if there is a problemCoryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # 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 theRegional work. Sarah and I need to be able to keep our principalsinformed of developments as well - we will work to avoid duplicationtoo. thanks...bp

Duplicate

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

BOG-- FOIA 10-251 --000679

From: Adrienne HadenTo: Diane Fraser; Barbara CornynSubject: Fw: Brainstorming meetingDate: 09/15/2008 02:24 PM

FYI.

Adrienne HadenAssistant DirectorBanking Supervision and RegulationBoard 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 -----

[email protected]

09/15/2008 01:05 PM


cc "Adrienne Haden" <[email protected]>,"Nina Nichols" <[email protected]>,[email protected]

Subject Brainstorming meeting

Listened on the NY call, they seem to have a pretty comprehensive effortunderway - split into several streams including:

Duplicate

BOG-- FOIA 10-251 --000680

From: [email protected]: [email protected]; [email protected]: BSR LIG; [email protected]; Rhonda Kelley; Jim NolanSubject: Re: Leh, aig etcDate: 09/15/2008 02:40 PM

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

----- Original Message -----From: Coryann.StefanssonSent: 09/15/2008 02:16 PM ASTTo: "[email protected]" <[email protected]>Cc: [email protected]; Betsy CrossSubject: Leh, aig etc

Duplicate

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

BOG-- FOIA 10-251 --000681

From: [email protected]: [email protected]: [email protected]: info on AIG & other infoDate: 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 amaximum dividend amount of the greater of (1) the prior year-end net income, or (2) 10% ofthe surplus as regards policyholders, without the approval of the state’s insurance regulatoryauthority. State insurance regulatory authorities have the power to approve extraordinarydividends on a case-by-case basis.

http://www.forbes.com/business/2008/09/15/insurance-aig-new-york-biz-wall-cx_lm_0915aigupdate.html

BOG-- FOIA 10-251 --000682

From: BSR FBO, BD. OF GOV. OF FED.To: [email protected]: (BN) Morgan Stanley, Goldman Bonds Drop as Bank Default Risk SurgesDate: 09/15/2008 03:01 PM

+------------------------------------------------------------------------------+

Morgan Stanley, Goldman Bonds Drop as Bank Default Risk Surges2008-09-15 17:21:58.140 GMT

By Abigail Moses and Bryan KeoghSept. 15 (Bloomberg) -- Morgan Stanley and Goldman Sachs

Group Inc. led a record surge in the cost of default protectionand a slump in bank bond prices after Lehman Brothers HoldingsInc. filed for bankruptcy.Credit-default swaps on Morgan Stanley soared to a recordand the New York-based firm's senior notes fell the most sincethey were sold six month ago. Goldman's senior notes plummeted toa record low and the cost of protecting its bonds against defaultrose to an all-time high. Sellers were demanding upfront paymentsfor protecting American International Group Inc. and WashingtonMutual Inc. on rising concern that they would default.Investor speculation that Lehman's bankruptcy may triggerfurther takeovers or mergers roiled credit markets after theTreasury and the Federal Reserve declined to rescue Lehman, asthey did in March with Bear Stearns Cos. Merrill Lynch & Co.agreed to be bought by Bank of America Corp. as the credit crisisthreatened the global financial industry.Goldman and Morgan Stanley, the two remaining major WallStreet investment banks, ``made the same mistakes'' as Merrilland Lehman, and ``anybody in that business is at risk,'' saidGregory Habeeb, a portfolio manager at Calvert Asset ManagementCo. 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 Lehmandidn't learn it. The lesson at Bear Stearns and Lehman may haveprecipitated Merrill to do something.''

Upfront Payments

Credit-default swaps on Morgan Stanley soared 189 basispoints to 453 and its senior notes now yield more than a typicalbond rated BB, or seven grades lower. Contracts on Goldman jumped119 basis points to 318 basis points. Credit default swaps onMerrill, the world's biggest brokerage firm, dropped after itagreed to the Bank of America purchase.Increased credit-market turmoil is forcing 17 financialcompanies' credit-default swaps to trade upfront, meaning thoseseeking protection must make an initial payment as well aspremiums, signaling rising default concern, according to CMADatavision.Sellers demanded 47 percentage points upfront and 5percentage points a year to protect the bonds of WashingtonMutual from default on concern that the biggest U.S. savings andloan won't survive the credit crisis, according to CMA Datavisionprices in New York. That compares with an upfront cost of 40percentage points on Sept. 12 and means it would cost $5 millioninitially and $500,000 a year to protect $10 million in bonds forfive years.

AIG Bonds

The upfront cost to protect AIG bonds from default soared16.5 percentage points to 29 percentage points after earlierrising 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 thedollar to yield 14 percent, according to Trace, the FinancialIndustry Regulatory Authority's bond-pricing service.The U.S. government's decision not to bail out Lehmanreduces the ``moral hazard'' introduced when Bear Stearns wasrescued and the Bank of England nationalized mortgage lenderNorthern Rock Plc, according to Juan Esteban Valencia, a creditstrategist at Societe Generale SA in London.``The get-out-of-jail-free card turned out not to be worthwhat they thought,'' said Matt King, head of quantitative creditstrategy at Citigroup Inc. in London. ``This makes it much, muchharder for financial institutions to get the financing theyneed.''Contracts on Wachovia Corp., the fourth-biggest U.S. bank,surged 129 basis points to 582 and JPMorgan Chase & Co. rose 42to 185, CMA data show. Merrill dropped 139 basis points to 319basis points. Bank of America increased 53 basis points to 212.

Morgan Stanley Notes

Morgan Stanley's 6.625 percent senior unsecured notes due in2018 fell 9.3 cents to 82.9 cents on the dollar for a yield of9.4 percent, according to Trace. Debt rated BB on average yields9.1 percent, according to Merrill's U.S. High-Yield BB Ratedindex. Morgan Stanley's notes are rated A1 by Moody's InvestorsService and A+ by Standard & Poor's.Goldman's 6.15 percent notes due in 2018 dropped 7.3 centsto 88.3 cents on the dollar to yield 7.9 percent, Trace datashow. The New York-based securities firm's 6.35 percent bonds duein 2034 fell 10.6 cents to 71.7 cents on the dollar, for a yieldof 9.3 percent.In Europe, HSBC Holdings Plc, Europe's biggest bank, andBarclays Plc led a jump in the cost of default protection,driving the benchmark Markit iTraxx Financial index of 25 banksand insurers a record 32 basis points higher to 127, according toJPMorgan.

HSBC, Barclays

The Markit CDX North America Investment Grade Index, linkedto the bonds of 125 companies in the U.S. and Canada, rose 35.5basis points to 186.5 as of 1:01 p.m., according to brokerPhoenix Partners Group. Earlier they traded as high as 190 basispoints.Credit-default swaps on London based HSBC soared 22 basispoints to 93, the most ever, according to CMA Datavision pricesin London. Barclays, the U.K.'s third-biggest bank, rose 34 to166, Zurich-based UBS AG jumped 28 to 164 and Spain's BancoSantander surged 22 to 122.Credit-default swaps, contracts conceived to protectbondholders against default, pay the buyer face value in exchangefor the underlying securities or the cash equivalent should acompany fail to adhere to its debt agreements. A rise indicatesdeterioration in the perception of credit quality; a declinesignals 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 inNew York. Editor: Michael Shanahan, John Pickering

To contact the reporter on this story:Abigail Moses in London +44-2-7673-2118 [email protected]

To contact the editor responsible for this story:Gavin Serkin at +44 207 673 2467 [email protected].

BOG-- FOIA 10-251 --000684

From: Jennifer BurnsTo: Coryann StefanssonSubject: Fw: Leh, aig etcDate: 09/15/2008 03:14 PMAttachments: Lehman20080909.xls

Evergreen Statement on Lehman Exposure 9-15-2008.pdfBill Dawson 9-15-2008 Lehman.doc

Jennifer Joseph BurnsBanking Supervision and RegulationThe Federal Reserve Bank of Richmond, Charlotte BranchOffice 704· 358· 2550 · Cell 704· 287· [email protected]

----- Forwarded by Jennifer Burns/RICH/FRS on 09/15/2008 03:13 PM -----

JeremyCarter/RICH/FRS

09/15/2008 02:51 PM

To Jennifer Burns/RICH/FRS@FRS

cc Lisa A White/RICH/FRS@FRS, RichardWesterkamp/RICH/FRS@FRS

Subject Re: Fw: Leh, aig etc

Jennifer,

We are also working on AIG exposure and I have been notified that

Please let me know if you have further questions.

Jeremy

Not Responsive

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

Not Responsive

BOG-- FOIA 10-251 --000685

Jeremy J CarterBanking Supervision and Regulation/Large Complex Bank OrganizationsThe Federal Reserve Bank of Richmond, Charlotte BranchOffice 704· 358· 2584 · Cell 704· 281· [email protected]

▼ Jennifer Burns/RICH/FRS

JenniferBurns/RICH/FRS

09/15/2008 02:28 PM

To Richard Westerkamp/RICH/FRS@FRS, JeremyCarter/RICH/FRS, Lisa A White/RICH/FRS@FRS

cc

Subject Fw: Leh, aig etc

FYI - Rich you mentioned that this was on Wachovia's radar screen yesterday.

Jennifer Joseph BurnsBanking Supervision and RegulationThe Federal Reserve Bank of Richmond, Charlotte BranchOffice 704· 358· 2550 · Cell 704· 287· [email protected]

----- Forwarded by Jennifer Burns/RICH/FRS on 09/15/2008 02:24 PM -----

[email protected]

09/15/2008 02:20 PM

To "[email protected]"<[email protected]>

cc [email protected], "Betsy Cross"<[email protected]>

Subject Leh, aig etc

Duplicate

BOG-- FOIA 10-251 --000686

BOG-- FOIA 10-251 --000687

Not Responsive

BOG-- FOIA 10-251 --000688

Not Responsive

BOG-- FOIA 10-251 --000689

Not Responsive

BOG-- FOIA 10-251 --000690

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BOG-- FOIA 10-251 --000691

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BOG-- FOIA 10-251 --000692

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BOG-- FOIA 10-251 --000693

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BOG-- FOIA 10-251 --000694

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BOG-- FOIA 10-251 --000695

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BOG-- FOIA 10-251 --000696

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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: Scott AlvarezTo: William R NelsonSubject: AIG memoDate: 09/15/2008 03:20 PMImportance: High

Bill, I'd also send it to the Vice Chair.

Scott

BOG-- FOIA 10-251 --000701

From: William R NelsonTo: Brian F MadiganSubject: aig memoDate: 09/15/2008 03:22 PMAttachments: AIG memo v4.doc


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 - 6 - Restricted 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


(b) (5)

BOG-- FOIA 10-251 --000711


(b) (5)

BOG-- FOIA 10-251 --000712


(b) (5)

BOG-- FOIA 10-251 --000713


(b) (5)

BOG-- FOIA 10-251 --000714


(b) (5)

BOG-- FOIA 10-251 --000715

From: William R NelsonTo: Brian F MadiganSubject: Fw: AIG memoDate: 09/15/2008 03:23 PM


ScottAlvarez/BOARD/FRS

09/15/2008 03:20 PM


cc

Subject AIG memo

Bill, I'd also send it to the Vice Chair.

Scott

BOG-- FOIA 10-251 --000716

From: David W SkidmoreTo: Michelle A Smith; Calvin Mitchell; Andrew WilliamsSubject: from wsj.com re AIGDate: 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-$75billion lending facility for AIG. Full update to follow. "

BOG-- FOIA 10-251 --000717

From: Michelle A SmithTo: David W SkidmoreCc: Andrew Williams; Calvin MitchellSubject: Re: from wsj.com re AIGDate: 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: Thomas J O'KeeffeTo: 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; DeniseGoodstein; Dennis Herbst; Dennis Ryan; Dianne Dobbeck; Dmitry J Gershik; Elizabeth Gress; Elizabeth Tafone;Gail Santora; [email protected]; Gerard Dages; Glen Reppy; Gretchen Cappiello; GretchenWalker; H Clay Saylor; Hasan Latif; Hayley Boesky; Homer Hill; Isabella Lo Piccolo; Jack Jennings; JamesEmbersit; James Hodgetts; James Wall; Jan Voigts; Jane Green; Jane Majeski; Jane Wakefield; JeanmarieDavis; Jeffrey Kowalak; Jeffrey Levine; Jeffrey Plaskett; Jim Mahoney; Joanna Wisniecka; John Beebe; JohnHeinze; John Reynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith JGruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; Kerry STREETS; KevinClarke; 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 LKwast; 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; RalphSantasiero; Randolph Brown; Renuka Vijayanathan; Richard Heeseler; Richard Kunen; Richard Naylor; RichardRoberts; Richard Westerkamp; Rick Weaver; Robert D Patalano; Robert Gutierrez; Roberto Perli; RogerGraham; Rohit Bansal; Ron Fox; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren;[email protected]; Stanley Poszywak; Stephanie Chaly; Steven Friedman; Steven J Manzari; StevenMirsky; Susan G Ballinger; Susan Goldberg; Terrence Checki; Theodore Lubke; Theonilla Lee-Chan; TheresaBarry; Thomas Dolan; Thomas J O'Keeffe; [email protected]; Todd Waszkelewicz; Wendy Ng; William BEnglish; William BRODOWS; William Rutledge; Wing Oon; Alexa Philo; Ann Miner; Barbara Yelcich; BetsyGordon; Caroline Frawley; Catherine Voigts; Che Sidanius; Christopher Hunter; Claudia Franco; Clinton Lively;Deborah Lohnau; Denise Goodstein; Dennis Ryan; Dianne Dobbeck; Glen Reppy; Gregory Gaare; JacquelineLovisa; James DeFalco; James Wall; Jane Wakefield; Jeanmarie Davis; Jim Mahoney; John Harvey; JohnReynolds; 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; StephanieChaly; Steven J Manzari; Steven Mirsky; Susan Goldberg; Timothy Carlin; Todd Waszkelewicz; Yogesh Shah

Cc: Bin Lang; Brian Hefferle; Caroline Nuffort; Isabella Lo Piccolo; Joanna Wisniecka; Joshua Sherwin; KathrynChen; Kenton Beerman; Mayra Gonzalez; Randolph Brown; Susan G Ballinger; Susan Goldberg; Thomas JO'Keeffe

Subject: Afternoon Liquidity Team UpdateDate: 09/15/2008 03:53 PMImportance: High

Restricted F.R.

Not Responsive

BOG-- FOIA 10-251 --000719

6. Money Funds –

notedReserve Funds had a large amount of Lehman and AIG exposure and willprobably ‘break the buck’ and need to be acquired by an outside party.


(b) (4)

Not Responsive

Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000720

From: Susan V FoleyTo: Jeffrey Marquardt; Jeff Stehm; RBOPS PAYMENT SYSTEM RISKSubject: Fw: AIG FSB information--UpdateDate: 09/15/2008 04:07 PMAttachments: AIG.xls


Spoke to Philly.

AIG FSB is at a zero cap (no collateral) on the real time monitor. The FSB wasnotified and was fine with the zero cap--they have very low levels of DLOD (averageabout $5,000). The FSB does have OC 10 documents on file. It appears that theFSB is fairly insulated from the affiliates/parent; had been more interactions in thepast but less so today.

In both cases, Philly indicated to the FSBs that the 23A exemption just announcedwould not apply to them. (thoughts?)

Philly will be circulating a memo shortly with this and other information. I willforward when I receive.

Susan FoleyAssistant DirectorPayment System RiskFederal Reserve Board(202) 452-3596----- Forwarded by Susan V Foley/BOARD/FRS on 09/15/2008 03:54 PM -----

Danielle ELittle/BOARD/FRS

09/15/2008 01:32 PM

To Jeffrey Marquardt/BOARD/FRS@BOARD, RBOPSPAYMENT SYSTEM RISK, JeffStehm/BOARD/FRS@BOARD

cc

Subject AIG FSB information

Not Responsive

Duplicate

BOG-- FOIA 10-251 --000721

From: Cynthia L MartinTo: Elise Liebers; Diane FraserCc: Kimberly A DeTrask; Patrick deFontnouvelle; Cynthia L Bordelon; Bart SimonSubject: Lending facility for AIG proposed todayDate: 09/15/2008 04:10 PM

Bank, Broker/Dealer & Insurance Underwriter - Operations and StrategyReport: Feds asking i-bank support for potential AIG optionsSeptember 15, 2008 3:57 PM ETBy Thomas Mason

The U.S. government has requested JPMorgan Chase & Co. and Goldman Sachs GroupInc. lead a lending facility for American International Group Inc. to the tune of $70 billionto $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. Easterntime that the Federal Reserve has hired Morgan Stanley for advice on potential options tosupport the insurance behemoth. The Times said aid could include a $20 billion bridge loan.

Earlier, Treasury Secretary Henry Paulson denied that the federal government wouldprovide a bridge loan.

"What's going on in New York has got nothing to do with any bridge loan from thegovernment," Paulson said at a Sept. 15 press conference. "What's going on in New York isa private-sector effort."

Site content and design Copyright © 2008, SNL Financial LC Usage of this product is governed by the Master Subscription Agreement


617 973-3178 (office)617 619-8478 (fax)

BOG-- FOIA 10-251 --000722

From: Jeffrey LevineTo: NY Bank Sup - LFI CPC UpdatesCc: Theonilla Lee-Chan; Barbara Yelcich; Gregory Gaare; Laura Braverman; Jennifer Tranter; Erin Upton; Edgar

Moreano; Christopher Hunter; Antonino Piscitello; James DeFalco; Liska Holness; Benjamin EddySubject: JPMC: Liquidity Update from afternoon meeting with TreasuryDate: 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: Calvin MitchellTo: Michelle A Smith; David W SkidmoreCc: Andrew WilliamsSubject: Re: from wsj.com re AIGDate: 09/15/2008 04:11 PM

This is not true. JPMC and GS are working on behalf of AIG to come up withsignificant funding.

(JPMC has been hired by AIG to help it explore possibilities. And Goldman representspotential principal investors.)

We are convening the parties to assist their discussions.

Duplicate

BOG-- FOIA 10-251 --000725

From: [email protected]: [email protected]; [email protected]; Michael Gibson; Jon Greenlee; Richard Charlton;

Jonathan Polk; Azish FilabiCc: NY Banksup AIG Monitoring and [email protected]: Re: please get a new dial in for the call with the insurance department...Date: 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 CalabiaSent: 09/15/2008 04:13 PM EDTTo: Patricia Mosser; Alejandro LaTorreCc: NY Banksup AIG Monitoring and AnalysisSubject: please get a new dial in for the call with the insurance

...and if you get the package they were discussing, could you pass italong?

(b) (5)

BOG-- FOIA 10-251 --000726

From: Michelle A SmithTo: Calvin MitchellSubject: Re: from wsj.com re AIGDate: 09/15/2008 04:13 PM

You telling people that?▼ Calvin Mitchell

Duplicate

BOG-- FOIA 10-251 --000727

From: Calvin MitchellTo: Michelle A SmithSubject: Re: from wsj.com re AIGDate: 09/15/2008 04:15 PM

Yup▼ Michelle A Smith

Duplicate

BOG-- FOIA 10-251 --000728

From: Patricia MosserTo: 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; ErikaGottfried; Gerard Dages; Jim Mahoney; Jonathan Polk; Kevin Coffey; Mari Baca; Mark Scapp; Min Kim; Niall ECoffey; Patricia Mosser; Paul Whynott; Richard Charlton; Tobias Adrian; Zoltan Pozsar; Michael S Gibson; Jon DGreenlee

Subject: AIG infoDate: 09/15/2008 04:15 PMAttachments: Scan001.pdf

----- Forwarded by Patricia Mosser/NY/FRS on 09/15/2008 04:14 PM -----

"Swift, Christopher"<[email protected]> Sent by: "Turco, Antonia"<[email protected]>

09/15/2008 03:11 PM

To "'[email protected]'"<[email protected]>, Patricia Mosser<[email protected]>,[email protected]

cc [email protected],[email protected], Joseph Fritsch<[email protected]>,[email protected], Robert Easton<[email protected]>, Dennis Fernez<[email protected]>, "Swift,Christopher" <[email protected]>

Subject RE: contacts

Please see attached materials for this call.

CS

Best Regards,Toni Turco on behalf of Chris SwiftExecutive Assistant to Christopher SwiftVice President and Chief Financial OfficerAIG Life and Retirement Services70 Pine Street - 17th FloorTel: 212-770-5286 / Fax: 212-770-7620

From: [email protected] [mailto:[email protected]] Sent: Monday, September 15, 2008 3:05 PMTo: Patricia Mosser; [email protected]: [email protected]; [email protected]; Joseph Fritsch;[email protected]; Robert Easton; Dennis Fernez; Swift, ChristopherSubject: 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-NYSent from my BlackBerry Handheld.

From: HFiner Sent: 09/15/2008 02:12 PM AST To: Patricia Mosser; [email protected] Cc: [email protected]; [email protected] Subject: Re: contacts

I'm trying to line up the ceo of the agc life holding company and the p&c leadership toanswer 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

[email protected]

09/15/2008 12:53 PM To "Patricia Mosser" <[email protected]> cc "Kermitt Brooks" <[email protected]>, "Hampton Finer"

<[email protected]>, "John Kenny" <[email protected]> Subject Re: contacts

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 bitlater today -- Would 3 pm work?

Trish

BOG-- FOIA 10-251 --000731

[email protected]

09/15/2008 11:30 AM

To "Patricia Mosser" <[email protected]> cc

Subject Re: contacts

Sure. I'm on the way now.

From: Patricia.MosserSent: 09/15/2008 11:27 AM ASTTo: Eric DinalloCc: Hampton Finer; John KennySubject: Re: contacts

Eric, Would you and your team have time for a followup call with us today? We'd like toget a sense of where you think things stand, and if possible some sense ofcontingency plans for the regulated parts of the firm.

Thanks Trish

BOG-- FOIA 10-251 --000732

[email protected]

09/14/2008 09:40 AM

To "Patricia Mosser" <[email protected]> cc "John Kenny" <[email protected]>, "Hampton Finer"

<[email protected]> 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 youwant to create a dial-in that we would join or you join ours? I'm cc-ing some of my groupwho may have ideas.

From: Patricia.MosserSent: 09/14/2008 09:12 AM ASTTo: Eric DinalloSubject: Re: contacts

Thanks. We have a few folks from the Board of Govs in DC who would also like to call in ifpossible. -----------------------------Patricia C. Mosser, FRB-NYSent from my BlackBerry Handheld.

From: EDinalloSent: 09/14/2008 08:59 AM ASTTo: Patricia Mosser

BOG-- FOIA 10-251 --000733

Subject: Re: contacts

Yes. I will set up.

From: Patricia.MosserSent: 09/14/2008 08:58 AM ASTTo: Eric DinalloSubject: Re: contacts

Would some of your experts be available for a conference call at 10:30 this morning? Trish-----------------------------Patricia C. Mosser, FRB-NYSent from my BlackBerry Handheld.

From: EDinalloSent: 09/13/2008 06:17 PM ASTTo: Patricia MosserSubject: Re: contacts

Just tried yiur cell.

From: Patricia.MosserSent: 09/13/2008 03:35 PM ASTTo: Eric DinalloSubject: Re: contacts

Eric,

What time would be convenient for a call? I can also be reached at my cell If I should contact you at your office, please let me know the number.

Thanks Trish

Patricia C. MosserSenior Vice President, Markets Group

(b) (6)

BOG-- FOIA 10-251 --000734

Capital Markets Analysis and TradingFederal Reserve Bank of New York(212) 720-6416

Trading desk: (212)720-6860/6880All numbers may be also dialed with 646 area code.

William Rutledge/NY/FRS

09/13/2008 01:14 PM

To [email protected] cc Patricia Mosser/NY/FRS@FRS

Subject contacts

Eric:

Contact numbers: Trish 720-6416; mine 720-5268

Bill

(b) (6)

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: Cynthia L MartinTo: Elise Liebers; Diane FraserSubject: Fw: FRB has hired Morgan Stanley for advice on AIG?Date: 09/15/2008 04:16 PM

oops, didn't read this through before sending ! - second paragraph below


617 973-3178 (office)617 619-8478 (fax)----- Forwarded by Cynthia L Martin/BOS/FRS on 09/15/2008 04:15 PM -----

Cynthia LMartin/BOS/FRS

09/15/2008 04:13 PM

To Elise Liebers/NY/FRS, Diane Fraser/BOARD/FRS

cc Kimberly A DeTrask/BOS/FRS@FRS, PatrickdeFontnouvelle/BOS/FRS@FRS, Cynthia LBordelon/BSR/CHI/FRS@FRS, BartSimon/BOS/FRS@FRS

Subject Lending facility for AIG proposed today

Bank, Broker/Dealer & Insurance Underwriter - Operations and StrategyReport: Feds asking i-bank support for potential AIG optionsSeptember 15, 2008 3:57 PM ETBy Thomas Mason

The U.S. government has requested JPMorgan Chase & Co. and Goldman Sachs GroupInc. lead a lending facility for American International Group Inc. to the tune of $70 billionto $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. Easterntime that the Federal Reserve has hired Morgan Stanley for advice on potential options tosupport the insurance behemoth. The Times said aid could include a $20 billion bridge loan.

Earlier, Treasury Secretary Henry Paulson denied that the federal government wouldprovide a bridge loan.

"What's going on in New York has got nothing to do with any bridge loan from thegovernment," 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


617 973-3178 (office)617 619-8478 (fax)

BOG-- FOIA 10-251 --000742

From: Michael S GibsonTo: Brian F Madigan; William R Nelson; Jon D Greenlee; William B EnglishSubject: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:20 PM

The call focused on the securities lending program and on the overall plan for AIG.

1. Securities lending

2. The overall plan

The investment bankers will brief Tim Geithner at 6pm.

Mike G.

(b) (8)

(b) (8)

BOG-- FOIA 10-251 --000743

From: Jon D GreenleeTo: Roger Cole; Deborah P BaileySubject: Fw: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:21 PM

I was on the call. Mike's summary below is accurate.


Duplicate

BOG-- FOIA 10-251 --000744

From: Deborah P BaileyTo: Rita C Proctor; Donald L Kohn; Elizabeth A Duke; Randall S Kroszner; Kevin WarshSubject: Fw: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:26 PM

FYI. You may have gotten this from other channels. ----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/15/2008 04:23 PM -----


09/15/2008 04:21 PM

To Roger Cole/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD

cc

Subject Fw: Notes from 3pm call with AIG, NYSID, FRBNY

Duplicate

BOG-- FOIA 10-251 --000745

From: Rita C ProctorTo:Subject: Fw: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:28 PM


09/15/2008 04:26 PM

To Rita C Proctor/BOARD/FRS@BOARD, Donald LKohn/BOARD/FRS@BOARD, Elizabeth ADuke/BOARD/FRS@BOARD, Randall SKroszner/BOARD/FRS@BOARD, KevinWarsh/BOARD/FRS@BOARD

cc


FYI. You may have gotten this from other channels. ----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/15/2008 04:23 PM -----


09/15/2008 04:21 PM

To Roger Cole/BOARD/FRS@BOARD, Deborah PBailey/BOARD/FRS@BOARD

cc


(b) (6)

Duplicate

BOG-- FOIA 10-251 --000746

From: Jon D GreenleeTo: Michael S GibsonCc: Brian F Madigan; Michael S Gibson; William B English; William R NelsonSubject: Re: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:31 PM

Mike - thanks for doing this.

Jon

Jon GreenleeAssociate DirectorBoard of Governors of the Federal Reserve SystemPhone (202) 452-2962▼ Michael S Gibson/Board/FRS


09/15/2008 04:20 PM

To Brian F Madigan/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD

cc

Subject Notes from 3pm call with AIG, NYSID, FRBNY

(b) (8)

(b) (8)

BOG-- FOIA 10-251 --000747

From: William R NelsonTo: Michael S GibsonSubject: Re: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:32 PM

thanks Mike.

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile:▼ Michael S Gibson/Board/FRS


09/15/2008 04:20 PM


cc


(b) (8)

(b) (6)

(b) (5)

BOG-- FOIA 10-251 --000748

From: Michael S GibsonTo: William R NelsonSubject: Re: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:33 PM



09/15/2008 04:32 PM


cc

Subject Re: Notes from 3pm call with AIG, NYSID, FRBNY

thanks Mike.



09/15/2008 04:20 PM


cc


(b) (5)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000749

From: William R NelsonTo: Brian F MadiganSubject: Fw: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:33 PM



09/15/2008 04:33 PM


cc




09/15/2008 04:32 PM


cc


(b) (5)

Duplicate

BOG-- FOIA 10-251 --000750

From: Michael S GibsonTo: Patrick M ParkinsonSubject: Fw: Notes from 3pm call with AIG, NYSID, FRBNYDate: 09/15/2008 04:36 PM

Pat, I forgot to include you on this. Mike----- Forwarded by Michael S Gibson/BOARD/FRS on 09/15/2008 04:36 PM -----


09/15/2008 04:20 PM


cc


Duplicate

BOG-- FOIA 10-251 --000751

From:To: Brian F MadiganCc: Donald L Kohn; Scott AlvarezSubject: Re: Draft memo on AIGDate: 09/15/2008 04:53 PMAttachments: AIG memo v4.doc

------Brian, here is the email on AIG that I composed before our conversation------------

Brian:

Ben



09/15/2008 03:30 PM


cc Scott Alvarez/BOARD/FRS@BOARD

Subject Draft memo on AIG

(b) (6)

(b) (6)

(b) (5)

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000752

(b) (5)

BOG-- FOIA 10-251 --000753

(b) (5)

BOG-- FOIA 10-251 --000754

(b) (5)

BOG-- FOIA 10-251 --000755

(b) (5)

BOG-- FOIA 10-251 --000756

(b) (5)

BOG-- FOIA 10-251 --000757

(b) (5)

BOG-- FOIA 10-251 --000758

(b) (5)

BOG-- FOIA 10-251 --000759

(b) (5)

BOG-- FOIA 10-251 --000760

(b) (5)

BOG-- FOIA 10-251 --000761

(b) (5)

BOG-- FOIA 10-251 --000762

(b) (5)

BOG-- FOIA 10-251 --000763

(b) (5)

BOG-- FOIA 10-251 --000764

From: Adrienne HadenTo: BSR Operational & IT Risk; Chris ChukwuSubject: Fw: Afternoon Liquidity Team UpdateDate: 09/15/2008 04:55 PM

Adrienne HadenAssistant DirectorBanking Supervision and RegulationBoard 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 -----


09/15/2008 03:56 PM

To Sabeth I Siddique/BOARD/FRS@BOARD, JamesEmbersit/BOARD/FRS@BOARD, NinaNichols/BOARD/FRS@BOARD, AdrienneHaden/BOARD/FRS@BOARD

cc

Subject Fw: Afternoon Liquidity Team Update


Thomas JO'Keeffe/NY/FRS@FRS

09/15/2008 03:53 PM

To Alejandro LaTorre/NY/FRS@FRS, AlexaPhilo/NY/FRS@FRS, Amy White/NY/FRS@FRS, AndrewSmall/NY/FRS@FRS, Anthony Cirillo/NY/FRS@FRS,Arthur Angulo/NY/FRS@FRS, BarbaraGorzkowski/NY/FRS@FRS, BarbaraYelcich/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS,Brandon Hall/NY/FRS@FRS, BrianPeters/NY/FRS@FRS, Caren Cox/NY/FRS@FRS,Caroline Frawley/NY/FRS@FRS, CarolineNuffort/NY/FRS@FRS, Catherine ATilford/BOARD/FRS@BOARD, CatherineVoigts/NY/FRS@FRS, Chris Haley/BOS/FRS@FRS,Chris McCurdy/NY/FRS@FRS, ChristinaZausner/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, ChristopherPowell/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS,Clinton Lively/NY/FRS@FRS, CorbinLong/NY/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, Craig FMarchbanks/BOARD/FRS@BOARD, CraigLeiby/NY/FRS@FRS, Cynthia Graves/NY/FRS@FRS,Daniel Muccia/NY/FRS@FRS, DanielSullivan/NY/FRS@FRS, Deborah Lohnau/NY/FRS@FRS,

BOG-- FOIA 10-251 --000765

Deborah P Bailey/BOARD/FRS@BOARD, DeniseGoodstein/NY/FRS@FRS, Dennis Herbst/NY/FRS@FRS,Dennis Ryan/NY/FRS@FRS, DianneDobbeck/NY/FRS@FRS, Dmitry JGershik/NY/FRS@FRS, ElizabethGress/RICH/FRS@FRS, ElizabethTafone/NY/FRS@FRS, Gail Santora/NY/FRS@FRS,[email protected], GerardDages/NY/FRS@FRS, Glen Reppy/NY/FRS@FRS,Gretchen Cappiello/NY/FRS@FRS, GretchenWalker/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS,Hasan Latif/NY/FRS@FRS, HayleyBoesky/NY/FRS@FRS, Homer Hill/NY/FRS@FRS,Isabella Lo Piccolo/NY/FRS@FRS, JackJennings/BOARD/FRS@BOARD, JamesEmbersit/BOARD/FRS@BOARD, JamesHodgetts/NY/FRS@FRS, James Wall/NY/FRS@FRS,Jan Voigts/NY/FRS@FRS, Jane Green/NY/FRS@FRS,Jane Majeski/NY/FRS@FRS, JaneWakefield/NY/FRS@FRS, JeanmarieDavis/NY/FRS@FRS, Jeffrey Kowalak/NY/FRS@FRS,Jeffrey Levine/NY/FRS@FRS, JeffreyPlaskett/SF/FRS@FRS, Jim Mahoney/NY/FRS@FRS,Joanna Wisniecka/NY/FRS@FRS, JohnBeebe/RICH/FRS@FRS, John Heinze/NY/FRS@FRS,John Reynolds/NY/FRS@FRS, JohnRicketti/NY/FRS@FRS, John Ruocco/NY/FRS@FRS, JonD Greenlee/BOARD/FRS@BOARD, JonathanPolk/NY/FRS@FRS, Joseph Galati/NY/FRS@FRS, JudithJ Gruttman/NY/FRS@FRS, KaraSulmasy/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS,Katheryn Van der Celen/NY/FRS@FRS, KentonBeerman/NY/FRS@FRS, Kerry STREETS/NY/FRS@FRS,Kevin Clarke/NY/FRS@FRS, KevinCoffey/NY/FRS@FRS, Kevin Lee/NY/FRS@FRS, KevinLittler/RICH/FRS@FRS, Kirsten Harlow/NY/FRS@FRS,Kyle Grieser/NY/FRS@FRS, Lance Auer/NY/FRS@FRS,Larry Bonnemere/NY/FRS@FRS, Laura AMacedo/BOARD/FRS@BOARD, LawrenceROSTOKER/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS,Lily Tham/NY/FRS@FRS, LindaRodriguez/NY/FRS@FRS, Lisa AWhite/RICH/FRS@FRS, Lisa Joniaux/NY/FRS@FRS,Lucinda M Brickler/NY/FRS@FRS, LydiaTshulos/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, MegMcConnell/NY/FRS@FRS, MeinradDanzer/NY/FRS@FRS, Michael Johnson/SF/FRS@FRS,Myron L Kwast/BOARD/FRS@BOARD, BinLang/NY/FRS@FRS, Brian Hefferle/NY/FRS@FRS,Caroline Nuffort/NY/FRS@FRS, Isabella LoPiccolo/NY/FRS@FRS, Joanna Wisniecka/NY/FRS@FRS,Joshua Sherwin/NY/FRS@FRS, KathrynChen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS,Mayra Gonzalez/NY/FRS@FRS, RandolphBrown/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS,Susan Goldberg/NY/FRS@FRS, Thomas JO'Keeffe/NY/FRS@FRS, Pamela SPowell/BOARD/FRS@BOARD, PatSoriano/BOARD/FRS@BOARD, Patrick MParkinson/BOARD/FRS@BOARD, PatrickRoche/NY/FRS@FRS, Philip Aquilino/SF/FRS@FRS,Ralph Santasiero/NY/FRS@FRS, RandolphBrown/NY/FRS@FRS, RenukaVijayanathan/NY/FRS@FRS, RichardHeeseler/NY/FRS@FRS, Richard Kunen/NY/FRS@FRS,Richard Naylor/BOARD/FRS@BOARD, RichardRoberts/NY/FRS@FRS, RichardWesterkamp/RICH/FRS@FRS, RickWeaver/NY/FRS@FRS, Robert DPatalano/NY/FRS@FRS, Robert

BOG-- FOIA 10-251 --000766

Gutierrez/NY/FRS@FRS, RobertoPerli/BOARD/FRS@BOARD, RogerGraham/NY/FRS@FRS, Rohit Bansal/NY/FRS@FRS,Ron Fox/RICH/FRS@FRS, Ronald Stroz/NY/FRS@FRS,Sandy Krieger/NY/FRS@FRS, SaraMahmoud/NY/FRS@FRS, SarahDahlgren/NY/FRS@FRS, [email protected],Stanley Poszywak/RICH/FRS@FRS, StephanieChaly/NY/FRS@FRS, Steven Friedman/NY/FRS@FRS,Steven J Manzari/NY/FRS@FRS, StevenMirsky/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS,Susan Goldberg/NY/FRS@FRS, TerrenceChecki/NY/FRS@FRS, Theodore Lubke/NY/FRS@FRS,Theonilla Lee-Chan/NY/FRS@FRS, TheresaBarry/BOS/FRS@FRS, Thomas Dolan/NY/FRS@FRS,Thomas J O'Keeffe/NY/FRS@FRS,[email protected], ToddWaszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS,William B English/BOARD/FRS@BOARD, WilliamBRODOWS/NY/FRS@FRS, WilliamRutledge/NY/FRS@FRS, Wing Oon/NY/FRS@FRS,Alexa Philo/NY/FRS@FRS, Ann Miner/NY/FRS@FRS,Barbara Yelcich/NY/FRS@FRS, BetsyGordon/NY/FRS@FRS, Caroline Frawley/NY/FRS@FRS,Catherine Voigts/NY/FRS@FRS, CheSidanius/NY/FRS@FRS, ChristopherHunter/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS,Clinton Lively/NY/FRS@FRS, DeborahLohnau/NY/FRS@FRS, DeniseGoodstein/NY/FRS@FRS, Dennis Ryan/NY/FRS@FRS,Dianne Dobbeck/NY/FRS@FRS, GlenReppy/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS,Jacqueline Lovisa/NY/FRS@FRS, JamesDeFalco/NY/FRS@FRS, James Wall/NY/FRS@FRS,Jane Wakefield/NY/FRS@FRS, JeanmarieDavis/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS, JohnHarvey/NY/FRS@FRS, John Reynolds/NY/FRS@FRS,John Ricketti/NY/FRS@FRS, JohnRuocco/NY/FRS@FRS, Karen Kahrs/NY/FRS@FRS, LisaJoniaux/NY/FRS@FRS, Lydia Tshulos/NY/FRS@FRS,Mark Scapp/NY/FRS@FRS, PatrickRoche/NY/FRS@FRS, Peter Drake/NY/FRS@FRS, RalphSantasiero/NY/FRS@FRS, RandolphBrown/NY/FRS@FRS, Richard Cahill/NY/FRS@FRS,Sara Mahmoud/NY/FRS@FRS, SarahDahlgren/NY/FRS@FRS, StephanieChaly/NY/FRS@FRS, Steven J Manzari/NY/FRS@FRS,Steven Mirsky/NY/FRS@FRS, SusanGoldberg/NY/FRS@FRS, Timothy Carlin/NY/FRS@FRS,Todd Waszkelewicz/NY/FRS@FRS, YogeshShah/NY/FRS@FRS

cc Bin Lang/NY/FRS@FRS, Brian Hefferle/NY/FRS@FRS,Caroline Nuffort/NY/FRS@FRS, Isabella LoPiccolo/NY/FRS@FRS, Joanna Wisniecka/NY/FRS@FRS,Joshua Sherwin/NY/FRS@FRS, KathrynChen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS,Mayra Gonzalez/NY/FRS@FRS, RandolphBrown/NY/FRS@FRS, Susan G Ballinger/NY/FRS@FRS,Susan Goldberg/NY/FRS@FRS, Thomas JO'Keeffe/NY/FRS@FRS

Subject Afternoon Liquidity Team Update

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)

BOG-- FOIA 10-251 --000769

From: [email protected]: [email protected]; [email protected]; [email protected]; [email protected];

[email protected]; [email protected]; [email protected]; [email protected];[email protected]

Subject: Bush To Be Briefed By Financial Markets Working Group TuesdayDate: 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 bebriefed 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 thechairs of the Federal Reserve Board, the Securities and Exchange Commission andthe 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 massivesell-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 March17, a day after the Fed provided a backstop for J.P. Morgan Chase's (JPM) purchaseof Bear Stearns.

Earlier Monday, Bush said the administration is working to ease any pain the market'scurrent problems may inflict on the economy at large.

"In the short run, adjustments in the financial markets can be painful - both for thepeople concerned about their investments, and for the employees of the affectedfirms," he said. "In the long run, I'm confident that our capital markets are flexible andresilient, and can deal with these adjustments."

BOG-- FOIA 10-251 --000770

From: Sola MajolagbeTo: 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; CoryannStefansson; Craig F Marchbanks; Craig Leiby; Cynthia Graves; Daniel Muccia; Denise Goodstein; Dennis Ryan;Dexter Williams; Diane Rose; Dianne Dobbeck; [email protected]; Gretchen Cappiello; H ClaySaylor; 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; JohnReynolds; John Ricketti; John Ruocco; Jon D Greenlee; Jonathan Polk; Joseph Galati; Judith J Gruttman; JyotiKohli; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kevin Clarke; Kevin Lee; Kirsten Harlow; KyleGrieser; 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; PhilipAquilino; Ralph Santasiero; Richard Naylor; Richard Roberts; Richard Westerkamp; Rick Weaver; RobertGutierrez; Roger Graham; Ronald Stroz; Sandy Krieger; Sara Mahmoud; Sarah Dahlgren;[email protected]; Stanley Poszywak; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan GBallinger; Terry Muckleroy; Theodore Lubke; Theonilla Lee-Chan; Theresa Barry; Thomas J O'Keeffe;[email protected]; Todd Waszkelewicz; Wendy Ng; William BRODOWS; William Hallacy; Wing Oon

Subject: Update with Richard Evans on the European Market conditionDate: 09/15/2008 05:16 PM

Notes from conference with Richard Evans (Chief Risk Officer forInstitutional Clients Group)

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

BOG-- FOIA 10-251 --000771

From: Philip AquilinoTo: NY Bank Sup - LFI CPC UpdatesCc: 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 GreenleeSubject: WFC 9/15 Update (as of 2pm PST)Date: 09/15/2008 05:17 PMAttachments: short term funding 9-12-08.xls

Restricted F.R.

Credit Risk (Philip Aquilino and Fred Minardi)

Liquidity Risk (Jeff Plaskett and Fred Minardi)

Market Perspective

Not Responsive

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

DNot Responsive

Not Responsive

BOG-- FOIA 10-251 --000772

The latest short term funding report:

Not Responsive

BOG-- FOIA 10-251 --000773

Not Responsive

BOG-- FOIA 10-251 --000774

Not Responsive

BOG-- FOIA 10-251 --000775

Not Responsive

BOG-- FOIA 10-251 --000776

From: Gustavo A SuarezTo: JNellie Liang; William B English; Michael S Gibson; Daniel M CovitzCc: Gustavo A SuarezSubject: AIG subs CPDate: 09/15/2008 05:25 PM

Internal FR-Confidential

We detected three unsecured financial CP programs from AIG subsidiaries in ourdatabase (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 comingdue over the next 7 days).2. International Lease Finance Corporation with $3.6 billion outstanding as of Sept12 ($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 AAfinancial rate to issue 30-day paper. (The AA financial rate is about 40 basis pointsabove the average AA nonfinancial rate).

In addition, AIG or affiliates sponsor two ABCP programs and one SIV with combinedoutstandings of $5.1 billion as of Sept. 12 ($1.9 billion coming due over the next 7days).

BOG-- FOIA 10-251 --000777

From: William R NelsonTo: Brian F MadiganSubject: AIG memoDate: 09/15/2008 05:27 PMAttachments: AIG memo v5.doc

Here is the memo. It still says "draft." Circulate to the authors?

Bill

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile:

(b) (5)

(b) (6)

BOG-- FOIA 10-251 --000778

(b) (5)

BOG-- FOIA 10-251 --000779

(b) (5)

BOG-- FOIA 10-251 --000780

(b) (5)

BOG-- FOIA 10-251 --000781

(b) (5)

BOG-- FOIA 10-251 --000782

(b) (5)

BOG-- FOIA 10-251 --000783

(b) (5)

BOG-- FOIA 10-251 --000784

(b) (5)

BOG-- FOIA 10-251 --000785

(b) (5)

BOG-- FOIA 10-251 --000786

(b) (5)

BOG-- FOIA 10-251 --000787

(b) (5)

BOG-- FOIA 10-251 --000788

(b) (5)

BOG-- FOIA 10-251 --000789

From: Mark CareyTo: IF Officers and Section ChiefsSubject: International ramifications of an AIG failureDate: 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 ofthe insurance business is property-casualty (including reinsurance) and theremainder is life & annuity.(Breakdowns by type can only be done by revenue-type measures and the variant ofaccounting rules used can affect the breakdown.)

About one-quarter of the property-casualty business is done outside the U.S. About80 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 AIGFinancial Products (AIGFP) derivatives and capital markets operation, which wasalways a relatively small part by revenue. AIG's current problem is to 1) be able tocontinue to raise somewhere in its corporate structure whatever soon-rolling-overdebt has previously been raised by the holding company or AIGFP, and 2) be able tomove requisite assets to whatever of its subs need them for posting collateral.

The insurance business is essentially all done through subsidiaries, with foreignbusiness done through foreign subsidiaries. All are regulated to one extent oranother. Much like our Section 23 regulation of banks, which restricts the holdingcompany'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 otherparts of the corporate entity.

Thus the importance of the New York insurance commissioner's announcement todaythat AIG could temporarily take $20 billion from U.S. insurance subs for use by otherparts of the consolidated entity.

Now turning to international ramifications of a failure, it is hard to be 100% sure ofanything because AIG naturally does not disclose all the details of its operations. Myspeculations:

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'sattention, but given that most such writeoffs would occur in AIGFP, maybe thebiggest problem is getting the capital to that entity, as noted previously.

(b) (5)

BOG-- FOIA 10-251 --000790

A large fraction off their liabilities are reserves related to insurance products. Debtoutstanding 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 thenews, AIG has significant derivative and securities lending positions and market orrating agency sentiment can affect AIG liquidity by affecting collateral requirementsand other operational aspects of these activities.

Major insurance companies are fiercely complicated entities, in many ways muchmore complicated than major investment banks. Too bad Nini is not aroundanymore. He knew insurance.

Mark CareyAdviserDivision of International FinanceFederal Reserve BoardWashington, DC 20551 USA(202) 452-2784 voice(202) 872-4926 [email protected] email

BOG-- FOIA 10-251 --000791

From: William R NelsonTo: Scott Alvarez; William B English; Roberto Perli; Michael S Gibson; Jon D GreenleeCc: Brian F Madigan; James A ClouseSubject: current draft, AIG memoDate: 09/15/2008 05:38 PMAttachments: AIG memo v5.doc

Here is the current draft of the AIG memo. Just FYI.

--Bill

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: (b) (6)


BOG-- FOIA 10-251 --000792

From: Paul BhattiTo: NY Bank Sup - LFI CPC UpdatesCc: Caroline Frawley; John Reynolds; Betsy Gordon; Paul H Austin; Christopher Powell; Jordan Pollinger; Andrew

SmallSubject: UBS Market Risk UpdateDate: 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

UBS specific topics

Not Responsive

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

Not Responsive

Not Responsive

Not Respon

sive

BOG-- FOIA 10-251 --000793

Not Responsive

BOG-- FOIA 10-251 --000794

Not Responsive

BOG-- FOIA 10-251 --000795

From: David W SkidmoreTo: Michelle A SmithSubject: Fw: WSJA(9/16) US Fed Officials Likely To Hold Rates SteadyDate: 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 SteadyMonday, 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-terminterest rates steady at Tuesday's meeting, even though financial markets put risingodds on a quick rate cut following the weekend's drama on Wall Street. But concern about deteriorating markets and financial institutions could quicklyprompt a change of heart among Fed officials or lead them to use their end-of-meeting statement to open the door to more rate cuts. The case for a quick rate cut: The market turmoil could add significantly to the riskof weaker economic growth ahead. The Fed has taken pre-emptive action repeatedlyover the past year, cutting interest rates as protection against a deeper economicdownturn. The failure of Lehman Brothers Holdings Inc., the rapid takeover of MerrillLynch & Co. by Bank of America Corp. and continuing concerns about insurancegiant American International Group Inc. added to those.

The decision depends largely on whether the market fallout, which remainedlimited in the U.S. early Monday, worsens on Tuesday. Fed officials expect somestress in markets. They are hoping it will remain manageable and not put too muchpressure on credit conditions and the overall economic outlook. But they alsorecognize that markets haven't faced the failure of a major investment bank with thefinancial system as interconnected as it is today. Futures markets on Monday put better than 50-50 odds on the Fed cutting thecurrent 2% federal-funds rate, at which banks lend to each other overnight, by aquarter percentage point on Tuesday. Before the weekend, traders put the likelihoodat just 10%. The risk for policy makers: Cutting rates immediately could remove some of theirflexibility in case the financial crisis worsens. The Fed cut rates after the marketcrash in 1987 -- a 25% drop in stocks -- and after the Sept. 11, 2001, terroristattacks. 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 awillingness to take action between meetings if necessary. Those words could re-emerge on Tuesday. At the very least, Fed officials are likely to suggest "increased uncertainty andincreased downside risks as a result of the turmoil and the likely associatedrestriction of credit," UBS economists said in a note to clients. Fed officials will likely point to other action they have taken to calm financialmarkets. Policy makers over the past year have sought to distinguish betweeninterest-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, acceptingequities as collateral for its loans.

Click here to go to Dow Jones NewsPlus, a web front page of today's mostimportant 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: Donald N GabbaiTo: John T ColwellCc: Sabeth I SiddiqueSubject: CDS spreads for insurance cos.Date: 09/15/2008 05:53 PMAttachments: CDS insurance.xls

John:

please include this in the report for tonight. Call it: Insurance companies andmonolines. 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+ A+ A+ A+ A A AA- BBB+ BBB+ BBB+ BBB+ BBB CCC- AA- AA AAGenworth Prudential MetLife Hartford XL Loews AIG MGIC Assurant CNA PMI Unitrin FGIC Swiss Re AMBAC MBIA

7/1/2008 CGNW1U5 Index CPRU1U5 Index CMET1U5 Index CHIG1U5 Index CXL1U5 Index CLTR1U5 Index CAIG1U5 Index CMTGI1U5 Index CAIZ1U5 Index CCNAF1U5 IndexLast Price 7/1/2008 296.789 7/1/2008 149.95 7/1/2008 123.3 7/1/2008 114.904 7/1/2008 313.382 7/1/2008 56.708 7/1/2008 224.239 7/1/2008 931.438 7/1/2008 122 7/1/2008 122.559 7/1/2008 1385.333 7/1/2008 175 7/1/2008 4471.99 07/01/08 129.0811 7/1/2008 2502.194 7/1/2008 2262.017

7/2/2008 302.689 7/2/2008 151.749 7/2/2008 121.65 7/2/2008 117.99 7/2/2008 319.694 7/2/2008 56.972 7/2/2008 230.155 7/2/2008 977.4 7/2/2008 122 7/2/2008 120.645 7/2/2008 1417.848 7/2/2008 175 7/2/2008 4323.428 07/02/08 127.8599 7/2/2008 2370.417 7/2/2008 2109.0427/3/2008 319.125 7/3/2008 154.95 7/3/2008 124.546 7/3/2008 121.65 7/3/2008 338.836 7/3/2008 57.774 7/3/2008 229.594 7/3/2008 971.493 7/3/2008 122 7/3/2008 121.65 7/3/2008 1421.671 7/3/2008 175 7/3/2008 4505.714 07/03/08 131.3794 7/3/2008 2242.131 7/3/2008 2065.4637/4/2008 322.64 7/4/2008 155.016 7/4/2008 124.546 7/4/2008 121.716 7/4/2008 339.166 7/4/2008 57.807 7/4/2008 228.142 7/4/2008 970.635 7/4/2008 122 7/4/2008 122.409 7/4/2008 1407.53 7/4/2008 175 7/4/2008 4508.061 07/04/08 131.1657 7/4/2008 2256.851 7/4/2008 2017.4867/7/2008 315.99 7/7/2008 150.379 7/7/2008 125 7/7/2008 120.594 7/7/2008 346.65 7/7/2008 57.495 7/7/2008 233.198 7/7/2008 939.209 7/7/2008 121.5 7/7/2008 125.99 7/7/2008 1399.455 7/7/2008 175 7/7/2008 3741.667 07/07/08 132.0699 7/7/2008 1864.966 7/7/2008 1816.4037/8/2008 321.039 7/8/2008 153.3 7/8/2008 124.868 7/8/2008 119.934 7/8/2008 346.65 7/8/2008 56.835 7/8/2008 232.274 7/8/2008 934.226 7/8/2008 122.667 7/8/2008 126.65 7/8/2008 1357.408 7/8/2008 175 7/8/2008 3884.828 07/08/08 136.8724 7/8/2008 1864.681 7/8/2008 1722.1687/9/2008 321.675 7/9/2008 155.094 7/9/2008 121.505 7/9/2008 120 7/9/2008 349.711 7/9/2008 57.845 7/9/2008 230 7/9/2008 933.617 7/9/2008 122.5 7/9/2008 123.325 7/9/2008 1228.838 7/9/2008 175 7/9/2008 3804.095 07/09/08 130.2962 7/9/2008 1495.18 7/9/2008 1359.684

7/10/2008 324.183 7/10/2008 155.094 7/10/2008 122.231 7/10/2008 119.769 7/10/2008 351.889 7/10/2008 56.855 7/10/2008 232.665 7/10/2008 911.502 7/10/2008 122.5 7/10/2008 123.325 7/10/2008 1276.898 7/10/2008 175 7/10/2008 3839.474 07/10/08 130.1354 7/10/2008 1551.666 7/10/2008 1491.0097/11/2008 330.709 7/11/2008 155.985 7/11/2008 122.429 7/11/2008 120.066 7/11/2008 357.615 7/11/2008 56.855 7/11/2008 240.957 7/11/2008 922.508 7/11/2008 122.5 7/11/2008 123.325 7/11/2008 1346.817 7/11/2008 175 7/11/2008 4007.349 07/11/08 132.1127 7/11/2008 1564.107 7/11/2008 1503.3657/14/2008 322.211 7/14/2008 153.934 7/14/2008 120.251 7/14/2008 116.436 7/14/2008 357.26 7/14/2008 56.02 7/14/2008 239.505 7/14/2008 949.406 7/14/2008 122.5 7/14/2008 123.241 7/14/2008 1326.705 7/14/2008 175 7/14/2008 3689.867 07/14/08 129.3372 7/14/2008 1535.077 7/14/2008 1459.7157/15/2008 331.625 7/15/2008 156.975 7/15/2008 123.056 7/15/2008 121.957 7/15/2008 376.864 7/15/2008 55.949 7/15/2008 247.871 7/15/2008 959.421 7/15/2008 122.5 7/15/2008 122 7/15/2008 1335.312 7/15/2008 175 7/15/2008 3526.828 07/15/08 136.7355 7/15/2008 1652.649 7/15/2008 1563.8747/16/2008 333.011 7/16/2008 156.645 7/16/2008 124.16 7/16/2008 124.929 7/16/2008 383.886 7/16/2008 54.784 7/16/2008 251.65 7/16/2008 962.061 7/16/2008 122.5 7/16/2008 122.221 7/16/2008 1284.622 7/16/2008 175 7/16/2008 3653.461 07/16/08 138.2495 7/16/2008 1622 7/16/2008 1518.0447/17/2008 329.175 7/17/2008 151.34 7/17/2008 122.939 7/17/2008 120.784 7/17/2008 379.439 7/17/2008 54.355 7/17/2008 245.05 7/17/2008 945.1 7/17/2008 122.5 7/17/2008 121.231 7/17/2008 1250 7/17/2008 175 7/17/2008 3269.373 07/17/08 127.3661 7/17/2008 1574.671 7/17/2008 1470.9197/18/2008 330 7/18/2008 150 7/18/2008 123.995 7/18/2008 120.586 7/18/2008 377.261 7/18/2008 54.053 7/18/2008 242.69 7/18/2008 936.058 7/18/2008 122.5 7/18/2008 121.198 7/18/2008 1219.173 7/18/2008 175 7/18/2008 3115.917 07/18/08 124.7866 7/18/2008 1561.649 7/18/2008 1457.2527/21/2008 317.525 7/21/2008 150.495 7/21/2008 122.957 7/21/2008 118.086 7/21/2008 377.822 7/21/2008 51.01 7/21/2008 225 7/21/2008 894.227 7/21/2008 122.5 7/21/2008 121.34 7/21/2008 1191.872 7/21/2008 175 7/21/2008 3127.34 07/21/08 120.5618 7/21/2008 1537.42 7/21/2008 1408.9247/22/2008 323.124 7/22/2008 149.736 7/22/2008 124.495 7/22/2008 114.401 7/22/2008 381.673 7/22/2008 54.086 7/22/2008 231.345 7/22/2008 875.575 7/22/2008 123.333 7/22/2008 120.896 7/22/2008 1219.591 7/22/2008 175 7/22/2008 3224.983 07/22/08 120.6018 7/22/2008 1533.839 7/22/2008 1411.7617/23/2008 320.946 7/23/2008 147.36 7/23/2008 122.774 7/23/2008 111.949 7/23/2008 377.119 7/23/2008 51.751 7/23/2008 230.256 7/23/2008 868.231 7/23/2008 122.5 7/23/2008 119.906 7/23/2008 1186.533 7/23/2008 175 7/23/2008 3000.357 07/23/08 114.1483 7/23/2008 1478.259 7/23/2008 1400.1247/24/2008 322.695 7/24/2008 149.109 7/24/2008 123.764 7/24/2008 107.906 7/24/2008 380.287 8/4/2008 45.835 7/24/2008 229.736 7/24/2008 869.221 7/24/2008 122.5 7/24/2008 119.906 7/24/2008 1198.898 7/24/2008 175 7/24/2008 3057.842 07/24/08 114.2265 7/24/2008 1473.943 7/24/2008 1426.9647/25/2008 323.66 7/25/2008 150 7/25/2008 124.556 7/25/2008 107.5 7/25/2008 382.919 8/5/2008 45.736 7/25/2008 233.325 7/25/2008 867.341 7/25/2008 122.5 7/25/2008 119.675 7/25/2008 1205.902 7/25/2008 175 7/25/2008 3102.973 07/25/08 116.1801 7/25/2008 1495.886 7/25/2008 1438.787/29/2008 340.31 7/29/2008 149.175 7/29/2008 128.079 7/29/2008 109.916 7/29/2008 255.232 8/6/2008 45.538 7/29/2008 239.711 7/29/2008 859.651 7/29/2008 122.5 7/29/2008 119.444 7/28/2008 1213.257 7/28/2008 175 7/28/2008 3078.279 07/28/08 116.0403 7/28/2008 1507.199 7/28/2008 1436.5417/30/2008 342.01 7/30/2008 149.246 7/30/2008 127.32 7/30/2008 106.581 7/30/2008 227.41 8/7/2008 45.538 7/30/2008 239.33 7/30/2008 883.311 7/30/2008 122.5 7/30/2008 119.345 7/29/2008 1209.87 7/29/2008 175 7/29/2008 2232.585 07/29/08 115.4404 7/29/2008 1429.41 7/29/2008 1338.0317/31/2008 335.431 7/31/2008 144.695 7/31/2008 130.429 7/31/2008 107.279 7/31/2008 214.179 8/11/2008 45.505 7/31/2008 243.325 7/31/2008 882.321 7/31/2008 123 7/31/2008 118.175 7/30/2008 1176.411 7/30/2008 175 7/30/2008 2337.538 07/30/08 113.4716 7/30/2008 1305.854 7/30/2008 1195.5998/1/2008 330.15 8/1/2008 143.424 8/1/2008 130.924 8/1/2008 107.213 8/1/2008 201.7 8/12/2008 45.934 8/1/2008 249.678 8/1/2008 885.424 8/1/2008 123 8/1/2008 117.68 7/31/2008 1207.623 7/31/2008 175 7/31/2008 3260.962 07/31/08 117.7387 7/31/2008 1336.277 7/31/2008 1258.9058/4/2008 329.64 8/4/2008 146.881 8/4/2008 130.28 8/4/2008 107.165 8/4/2008 196.139 8/13/2008 45.934 8/4/2008 253.828 8/4/2008 883.929 8/4/2008 123.5 8/4/2008 117.01 8/1/2008 1170.823 8/1/2008 175 8/1/2008 2998.333 08/01/08 121.9952 8/1/2008 1231.966 8/1/2008 1201.0718/5/2008 328.97 8/5/2008 146.551 8/5/2008 130.016 8/5/2008 107.165 8/5/2008 186.7 8/15/2008 45.401 8/5/2008 250.33 8/5/2008 867.46 8/5/2008 123.333 8/5/2008 113.911 8/4/2008 1168.162 8/4/2008 175 8/4/2008 3061.833 08/04/08 126.5739 8/4/2008 1249.467 8/4/2008 1198.2798/6/2008 329.696 8/6/2008 146.485 8/6/2008 129.95 8/6/2008 106.34 8/6/2008 186.931 8/19/2008 46.495 8/6/2008 245.726 8/6/2008 886.446 8/6/2008 123.333 8/6/2008 114.439 8/5/2008 1144.24 8/5/2008 175 8/5/2008 3263.79 08/05/08 124.7456 8/5/2008 1248.221 8/5/2008 1176.0478/7/2008 346.65 8/7/2008 146.98 8/7/2008 139.579 8/7/2008 106.066 8/7/2008 183.35 8/20/2008 47.089 8/7/2008 270.759 8/7/2008 863.404 8/7/2008 122.5 8/7/2008 116.675 8/6/2008 1122.866 8/6/2008 175 8/6/2008 3046.232 08/06/08 124.5788 8/6/2008 1232.962 8/6/2008 1158.1218/8/2008 360.214 8/8/2008 150.295 8/8/2008 142.343 8/8/2008 107.254 8/8/2008 185.264 8/21/2008 50.635 8/8/2008 271.419 8/8/2008 863.369 8/8/2008 122.5 8/8/2008 117.335 8/7/2008 1240.221 8/7/2008 175 8/7/2008 3187.447 08/07/08 129.1662 8/7/2008 1330.414 8/7/2008 1220.353

8/11/2008 373.911 8/11/2008 151.96 8/11/2008 142.475 8/11/2008 108.023 8/11/2008 181.139 8/22/2008 50.876 8/11/2008 269.67 8/11/2008 865.644 8/11/2008 122.5 8/11/2008 115 8/8/2008 1246.471 8/8/2008 175 8/8/2008 3613.324 08/08/08 130.1069 8/8/2008 1335.285 8/8/2008 1187.9368/12/2008 375 8/12/2008 152.29 8/12/2008 143.267 8/12/2008 109.673 8/12/2008 178.799 8/26/2008 50.579 8/12/2008 269.228 8/12/2008 862.542 8/12/2008 123.333 8/12/2008 115.165 8/11/2008 1226.538 8/11/2008 175 8/11/2008 3348.741 08/11/08 127.2747 8/11/2008 1261.404 8/11/2008 1122.2358/13/2008 377.904 8/13/2008 158.564 8/13/2008 147.625 8/13/2008 113.361 8/13/2008 176.99 8/27/2008 52.221 8/13/2008 278.194 8/13/2008 871.487 8/13/2008 122.5 8/13/2008 117.726 8/12/2008 1204.109 8/12/2008 175 8/12/2008 3499.968 08/12/08 125.216 8/12/2008 1294.794 8/12/2008 1129.5268/14/2008 379.175 8/14/2008 160.536 8/14/2008 153.861 8/14/2008 119.952 8/14/2008 175.264 8/28/2008 51.83 8/14/2008 289.211 8/14/2008 863.799 8/14/2008 122.5 8/14/2008 117.759 8/13/2008 1252.185 8/13/2008 175 8/13/2008 3723.186 08/13/08 125.0913 8/13/2008 1387.194 8/13/2008 1217.1418/15/2008 379.266 8/15/2008 164.975 8/15/2008 153.861 8/15/2008 120.787 8/15/2008 173.886 8/29/2008 51.83 8/15/2008 300.66 8/15/2008 862.874 8/15/2008 122.5 8/15/2008 117.759 8/14/2008 1040.08 8/14/2008 175 8/14/2008 3693.847 08/14/08 125.1669 8/14/2008 1392.15 8/14/2008 1186.228/19/2008 383.597 8/19/2008 168.305 8/19/2008 160 8/19/2008 133.333 8/19/2008 174.29 9/3/2008 51.599 8/18/2008 320.082 8/19/2008 883.662 8/19/2008 123.333 8/19/2008 116.541 8/15/2008 1040.211 8/15/2008 175 8/15/2008 3617.414 08/15/08 124.6281 8/15/2008 1346.747 8/15/2008 1083.5318/20/2008 393.911 8/20/2008 191.889 8/20/2008 193.44 8/20/2008 146.336 8/20/2008 180.404 9/4/2008 51.83 8/19/2008 335.214 8/20/2008 893.921 8/20/2008 127.5 8/20/2008 127.739 8/18/2008 1071.363 8/18/2008 175 8/18/2008 3636.154 08/18/08 123.7735 8/18/2008 1400.993 8/18/2008 1164.2498/21/2008 395 8/21/2008 198.886 8/21/2008 202.211 8/21/2008 161.221 8/21/2008 180.239 9/5/2008 51.929 8/20/2008 349.381 8/21/2008 914.96 8/21/2008 127.5 8/21/2008 127.475 8/19/2008 1131.388 8/19/2008 177.5 8/19/2008 3590.483 08/19/08 125.7743 8/19/2008 1456.969 8/19/2008 1237.9838/22/2008 392.261 8/22/2008 199.439 8/22/2008 201.246 8/22/2008 158.35 8/22/2008 178.325 9/8/2008 51.746 8/21/2008 367.599 8/22/2008 904.763 8/22/2008 127.5 8/22/2008 125.335 8/20/2008 1147.643 8/20/2008 177.5 8/20/2008 3717.594 08/20/08 125.5473 8/20/2008 1493.911 8/20/2008 1238.6058/26/2008 391.411 8/26/2008 198.779 8/26/2008 202.005 8/26/2008 159.835 8/26/2008 183.325 9/9/2008 52.241 8/22/2008 365.165 8/26/2008 917.7 8/26/2008 127.5 8/26/2008 127.15 8/21/2008 1184.692 8/21/2008 177.5 8/21/2008 3811.586 08/21/08 129.149 8/21/2008 1496.228 8/21/2008 1234.4448/27/2008 391.914 8/27/2008 198.094 8/27/2008 203.325 8/27/2008 160.561 8/27/2008 183.061 9/10/2008 50.485 8/25/2008 374.282 8/27/2008 924.96 8/27/2008 127.5 8/27/2008 126.094 8/22/2008 1172.009 8/22/2008 177.5 8/22/2008 3699.936 08/22/08 127.7926 8/22/2008 1500.538 8/22/2008 1225.5548/28/2008 396.495 8/28/2008 197.01 8/28/2008 202.566 8/28/2008 158.251 8/28/2008 181.675 9/11/2008 51.716 8/26/2008 388.325 8/28/2008 947.752 8/28/2008 129 8/28/2008 127.764 8/25/2008 1169.78 8/25/2008 177.5 8/25/2008 3708.736 08/25/08 127.7926 8/25/2008 1497.538 8/25/2008 1236.8358/29/2008 389.391 8/29/2008 195.921 8/29/2008 199.439 8/29/2008 156.931 8/29/2008 180.586 9/12/2008 51.815 8/27/2008 389.769 8/29/2008 938.512 8/29/2008 129 8/29/2008 128.325 8/26/2008 1191.867 8/26/2008 177.5 8/26/2008 3774.308 08/26/08 129.7629 8/26/2008 1505.545 8/26/2008 1233.179/3/2008 386.784 9/3/2008 192.241 9/3/2008 195.982 9/3/2008 152.099 9/3/2008 171.246 8/28/2008 377.789 9/3/2008 919.577 9/3/2008 129 9/3/2008 123.482 8/27/2008 1231.439 8/27/2008 177.5 8/27/2008 3924.62 08/27/08 132.511 8/27/2008 1522.42 8/27/2008 1245.6119/4/2008 387.081 9/4/2008 192.571 9/4/2008 197.071 9/4/2008 152.99 9/4/2008 172.335 8/29/2008 377.789 9/4/2008 927.67 9/4/2008 129 9/4/2008 121.675 8/28/2008 1216.167 8/28/2008 177.5 8/28/2008 3350.019 08/28/08 131.6254 8/28/2008 1472.79 8/28/2008 1161.6039/5/2008 390.381 9/5/2008 192.736 9/5/2008 196.094 9/5/2008 153.98 9/5/2008 174.401 9/1/2008 377.789 9/5/2008 923.049 9/5/2008 129 9/5/2008 122.236 8/29/2008 1201.835 8/29/2008 177.5 8/29/2008 3414.351 08/29/08 126.9153 8/29/2008 1451.594 8/29/2008 1176.0929/8/2008 386.951 9/8/2008 192.469 9/8/2008 191.545 9/8/2008 150.99 9/8/2008 172.251 9/2/2008 378.218 9/8/2008 888.714 9/8/2008 125.5 9/8/2008 120 9/1/2008 1201.257 9/1/2008 177.5 9/1/2008 3423.658 09/01/08 128.1335 9/1/2008 1449.632 9/1/2008 1182.1559/9/2008 384.905 9/9/2008 194.02 9/9/2008 193.921 9/9/2008 153.564 9/9/2008 166.65 9/3/2008 381.617 9/9/2008 906.996 9/9/2008 128.667 9/9/2008 120.99 9/2/2008 1183.015 9/2/2008 177.5 9/2/2008 3504.079 09/02/08 124.4172 9/2/2008 1382.004 9/2/2008 1120.734

9/10/2008 387.196 9/10/2008 191.226 9/10/2008 191.556 9/10/2008 156.336 9/10/2008 166.65 9/4/2008 430 9/10/2008 937.422 9/10/2008 132.383 9/10/2008 123.325 9/3/2008 1176.805 9/3/2008 177.5 9/3/2008 3561.749 09/03/08 127.2205 9/3/2008 1358.113 9/3/2008 1127.8649/11/2008 393.524 9/11/2008 195.285 9/11/2008 193.041 9/11/2008 173.011 9/11/2008 181.17 9/5/2008 438.3 9/11/2008 947.52 9/11/2008 138.25 9/11/2008 125.381 9/4/2008 1175.468 9/4/2008 182.5 9/4/2008 3519.573 09/04/08 128.8064 9/4/2008 1374.497 9/4/2008 1175.6289/12/2008 405.618 9/12/2008 199.196 9/12/2008 202.739 9/12/2008 182.046 9/12/2008 207.425 9/8/2008 437.624 9/12/2008 951.682 9/12/2008 138.25 9/12/2008 125.645 9/5/2008 1174.49 9/5/2008 185 9/5/2008 3627.03 09/05/08 131.4954 9/5/2008 1379.543 9/5/2008 1182.052

9/9/2008 446.237 9/8/2008 1163.878 9/8/2008 185 9/8/2008 3568.921 09/08/08 124.9603 9/8/2008 1348.719 9/8/2008 1157.1439/10/2008 467.444 9/9/2008 1196.683 9/9/2008 185 9/9/2008 3605.177 09/09/08 127.1684 9/9/2008 1370.035 9/9/2008 1187.0529/11/2008 662.338 9/10/2008 1229.911 9/10/2008 185 9/10/2008 4239.555 09/10/08 125.9692 9/10/2008 1385.583 9/10/2008 1204.0199/12/2008 858.112 9/11/2008 1244.585 9/11/2008 187.5 9/11/2008 4241.827 09/11/08 129.1695 9/11/2008 1406.566 9/11/2008 1203.4149/15/2008 1468.244 9/12/2008 1240.857 9/12/2008 187.5 9/12/2008 4389.516 09/12/08 129.8391 9/12/2008 1407.495 9/12/2008 1204.463

BOG-- FOIA 10-251 --000799

0

200

400

600

800

1000

1200

1400

1600

CDS Spreads for AIG9/15/08 -12pm 1468.24

BOG-- FOIA 10-251 --000800

0

50

100

150

200

250

300

350

400

450

CDS Spreads for A Rated Securities

Genworth

Prudential

MetLife

Hartford

XL

Loews

BOG-- FOIA 10-251 --000801

0

500

1000

1500

2000

2500

3000

CDS Spreads for AA Securities

AMBAC

MBIA

Swiss Re

BOG-- FOIA 10-251 --000802

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

CDS Spreads for BBB & CCC Rated Securities

MGIC

Assurant

CNA

PMI

Unitrin

FGIC

BOG-- FOIA 10-251 --000803

From: Melissa A VanlandinghamTo: Jeff Stehm; Jeffrey MarquardtSubject: today's updateDate: 09/15/2008 06:00 PMAttachments: Infrastructure Status Report 0915 6PM.doc


BOG-- FOIA 10-251 --000804

FR Restricted 09/15/08

Page 1 of 3 1

Monday, September 15th 6:00 PM Infrastructure Status Report

Not Responsive

BOG-- FOIA 10-251 --000805


Page 2 of 3 2

Not Responsive

Not Responsive

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

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

Not Responsive

BOG-- FOIA 10-251 --000806


Page 3 of 3 3

Not Responsive

BOG-- FOIA 10-251 --000807

From: David H BowmanTo: Mark CareyCc: IF Officers and Section ChiefsSubject: Re: International ramifications of an AIG failureDate: 09/15/2008 06:01 PM

It may be of some interest to note that one of AIG's subsidiaries is a nontrivialplayer in the FX spot market, acting as a broker for about $30 billion in FX tradeseach 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 thenthere could be a noticeable disruption to the FX markets.

▼ Mark Carey/BOARD/FRS

MarkCarey/BOARD/FRS

09/15/2008 05:29 PM

To IF Officers and Section Chiefs

cc

Subject International ramifications of an AIG failure

Duplicate

BOG-- FOIA 10-251 --000808

From: Linda RodriguezTo: NY Bank Sup - LFI CPC Updates@FRSCc: John Ricketti; Stephanie Chaly; Yogesh Shah; Timothy Carlin; Carol Roller; Pat Soriano; Bridget Habib; Nirali Deringer; Erika Gottfried; Christopher HunterSubject: ZFRSSE - Barclays Liquidity/Funding Update & Charts (3pm & 5pm calls)Date: 09/15/2008 06:03 PM

RESTRICTED FR

Barclays Broker/Dealer:

The next liquidity/funding call with Barclays will be Tuesday at 8:15am.

Not Responsive

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

Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000809

Not Responsive

BOG-- FOIA 10-251 --000810

Not Responsive

BOG-- FOIA 10-251 --000811

From:To: [email protected]; [email protected]; [email protected];

[email protected]: RE: CP Market Update:Date: 09/15/2008 06:07 PM

If one more investor asks me to bid back or AIG I am going to scream. Thishas 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 rightnow. Sec lenders pulling collateral. This is total chaos right now. SOMA program upto 25.8 bln vs 1.4 bln Friday. These are incredible times.

(b) (4)(b) (4)

(b) (4)

NR

BOG-- FOIA 10-251 --000812

From: Antonio AlvarezTo: NY Bank Sup - LFI CPC UpdatesCc: 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; CalvinBailey; Timothy Sheridan; Christina Zausner; Steven J Manzari

Subject: Citi Counterparty Update 9-15-08 PMDate: 09/15/2008 06:08 PM

4:30 PM Discussion with Counterparty Risk Management (Tom Schwartz, Head ofCounterparty Credit, & staff) and OCC.

Regards,

----------------------------------------------------Antonio AlvarezCredit Risk Coordinator - Wholesale

Not Responsive

D

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

BOG-- FOIA 10-251 --000813

Citigroup Continuous Monitoring TeamFederal Reserve Bank of New YorkCitigroup On-site: (212) 527-1255; FRBNY Voicemail: (212) 720-5069Blackberry: (718) 612-3095

BOG-- FOIA 10-251 --000814

From: Bart SimonTo: Diane Fraser; Elise LiebersCc: Cynthia L Martin; Kimberly A DeTrask; Stacy L ColemanSubject: AIG - other factorsDate: 09/15/2008 06:17 PM

After some brief conversations with senior insurance brokers at

P&C- Neither have made a concrete decision on whether or not AIG is still a viablemarket for their clients. Both did say that most clients that are in renewal of a 10/1inception date have asked for alternative quotes and have indicated a strongpreference for the alternative. 12/31s have also asked for alternatives.

- They may consider stalling any additional LOCs or payments on loss sensitiveprograms 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 ratingon surety bond (BBB?). Should the AIG company that provides these bonds fallbelow that, a significant # of projects will be in technical default. I'm not sure whatthe process is for unwinding this.

Across risks- ndicated that for nonfinancial firms this was a large wake-up call. Manycompanies 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 thebrokers have concern over. The larger companies may spread business and/or mayloose only one part of their program. Smaller companies may have a lot of duediligence to do to replace the various services provided by AIG.

- Both highlighted that their clients have been commenting on the regulatorystructure. It was a wake-up call here as well.

_________________________Bart SimonFederal Reserve Bank of Boston600 Atlantic AvenueBoston, Massachusetts 02210(617) 973-3231

Mailing address:Post Office Box 55882Boston, Massachusetts 02205

(b) (4)

b4

BOG-- FOIA 10-251 --000815

From: Hasan LatifTo: NY Bank Sup - LFI CPC UpdatesCc: Dennis Ryan; Adrian LawrenceSubject: SG Market Risk Update 9/15Date: 09/15/2008 06:18 PM

Restricted FR

Market Risk Update for 9/15/08

(b) (4) and (b) (8)

Not Responsive

BOG-- FOIA 10-251 --000816

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000817

From: Nancy R BerladTo: Coryann StefanssonCc: BSR LIGSubject: Fw: Citi Counterparty Update 9-15-08 PMDate: 09/15/2008 06:26 PM

Cory,

The key issues indicated in the email below:

AIG

Duplicate

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000818

From: Jack JenningsTo: Roger Cole; Deborah P Bailey; [email protected]: [email protected]: Summary of Foreign Supervisors Call, September 15, 4:00 p.m.Date: 09/15/2008 06:26 PM

Summary of Foreign Supervisors Call, September 15, 4:00 p.m.

Participants

US - Board, FRBNY, SEC, CFTCUK - FSA, BOESwiss - EBKGermany - Bundesbank, BaFinFrance - Commission BancaireJapan - FSAHong Kong - HK Securities and Futures Commission

Not Responsive

BOG-- FOIA 10-251 --000819

Jack P. Jennings, IIAssociate DirectorInternational Supervision, Training and AssistanceDivision of Banking Supervision and RegulationPhone: (202) 452-3053Fax: (202) 452-2770Email: [email protected]

Not Responsive

Not Responsive

(b) (4)

BOG-- FOIA 10-251 --000820

From: Michael S GibsonTo: Gustavo A SuarezCc: Daniel M Covitz; Gustavo A Suarez; JNellie Liang; William B EnglishSubject: Re: AIG subs CPDate: 09/15/2008 06:26 PM

I was on a phone call with FRBNY and NYSID just now, they said AIG's CP did notroll today.

Mike

▼ Gustavo A Suarez/BOARD/FRS

Gustavo ASuarez/BOARD/FRS

09/15/2008 05:25 PM

To JNellie Liang/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, Daniel MCovitz/BOARD/FRS@BOARD

cc Gustavo A Suarez/BOARD/FRS@BOARD

Subject AIG subs CP

Duplicate

BOG-- FOIA 10-251 --000821

From: Peter DeMontravelTo: NY Bank Sup - LFI CPC Updates@FRSCc: Pat Soriano; John Harvey; Taitu Wondwosen; Paula Premo; Peter DeMontravel; Om Arya; Jane Wakefield;

Lucette PecoraroSubject: Deutsche Bank - Treasury Liquidity Meeting - 3 PMDate: 09/15/2008 06:28 PMAttachments: Deutsche Liquidity Meeting at 3 PM.9.15.doc

Please see the attached prepared by Peter DeMontravel and Paula Premo

Peter DeMontravelBank Supervision GroupFederal Reserve Bank of New [email protected]

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: James EmbersitTo: Jon D GreenleeCc: Sabeth I Siddique; Adrienne Haden; Nina NicholsSubject: Re: Update on where we stand with id of other weak firms?Date: 09/15/2008 06:30 PMAttachments: 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 invarious sectors that may be impacted by the Lehman or AIG "events". The objectivewas to identify names for ongoing monitoring.

Jim Embersit202-452-5249▼ Jon D Greenlee/BOARD/FRS


09/15/2008 05:57 PM

To Sabeth I Siddique/BOARD/FRS@BOARD, JamesEmbersit/BOARD/FRS@BOARD

cc

Subject Update on where we stand with id of other weakfirms?


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:

B. Valenti

Firm SymbolCapitalization

(billions) Price

Change from

09/12/08

Yahoo Regional Brokerage Index ^YHOh761 NA 851.82 -3.69%

Select firms within the indexBlackRock, Inc. BLK 27.4$ 201.00$ -0.99%TD Ameritrade AMTD 11.6 19.64 -3.68%Legg Mason LM 5.3 37.13 -7.90%Raymond James Company RJF 3.7 30.31 -2.73%Jefferies Group JEF 2.8 17.46 1.45%Waddell & Reed WDR 2.2 25.93 -3.71%Greenhill& Company GHL 1.8 65.99 3.06%Etrade Financial ETFC 1.6 2.98 -9.70%Knight Captial Group NITE 1.4 15.41 -6.38%Friedman Billings Ramsey FBR 0.3 1.55 -9.88%

58.0$ 417.40$

Large Brokerage FirmsGoldman Sachs GS 51.5 135.50 -12.13%Morgan Stanley MS 34.8 32.19 -13.54%

BOG-- FOIA 10-251 --000826

Comparison of Morgan Stanley and Goldman Sachs CRE and Consumer Mortgage Paper

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

MS GS

CRE 22.0$ 17.0$ Alt-A 12.0 4.7 Prime na 8.6 Leveraged Loans 13.0 19.0 Total: 47.0 49.3

Capital: 34.5$ 44.8$ Percent of Capital 136% 110%

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

1 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.

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

0

200

400

600

800

1000

1200

1400

1600

CDS Spreads for AIG9/15/08 -12pm 1468.24

0

500

1000

1500

2000

2500

3000

CDS Spreads for AA Securities

AMBAC

MBIA

Swiss Re

BOG-- FOIA 10-251 --000830

D. Gabbai

0

50

100

150

200

250

300

350

400

450

CDS Spreads for A Rated Securities

Genworth

Prudential

MetLife

Hartford

XL

Loews

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

CDS Spreads for BBB & CCC Rated Securities

MGIC

Assurant

CNA

PMI

Unitrin

FGIC

BOG-- FOIA 10-251 --000831

J. Colwell

Not Responsive

BOG-- FOIA 10-251 --000832

From: Patricia MosserTo: 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; DianneDobbeck; 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 SGibson; Jon D Greenlee

Subject: Re: AIG infoDate: 09/15/2008 06:32 PM

For FRBNY: no briefing for Tim. He's left for DC --FOMC meeting tomorrow. I'll sendinfo when I get it. -----------------------------Patricia C. Mosser, FRB-NYSent 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; ChristopherCalabia; 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"<[email protected]> Sent by: "Turco, Antonia"<[email protected]>

09/15/2008 03:11 PM

To "'[email protected]'"<[email protected]>, Patricia Mosser<[email protected]>,[email protected]

cc [email protected],[email protected], Joseph Fritsch<[email protected]>,[email protected], Robert Easton<[email protected]>, Dennis Fernez<[email protected]>, "Swift,Christopher" <[email protected]>

Subject RE: contacts

Duplicate

BOG-- FOIA 10-251 --000833

From: Alejandro LaTorreTo: Patricia MosserCc: 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; GerardDages; 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


He just called me an asked for a briefing later tonight - we think 10-10:30. Just gotthe call 5min ago.



09/15/2008 06:36 PM

To Patricia Mosser/NY/FRS@FRS, AdamAshcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Alexa Philo/NY/FRS@FRS,Alexander J Psomas/NY/FRS@FRS, AzishFilabi/NY/FRS@FRS, Bard Stermasi/NY/FRS@FRS,Brian Begalle/NY/FRS@FRS, CatherineVoigts/NY/FRS@FRS, ChristopherCalabia/NY/FRS@FRS, Danielle Vicente/NY/FRS@FRS,Denise Goodstein/NY/FRS@FRS, DianneDobbeck/NY/FRS@FRS, Elise Liebers/NY/FRS@FRS,Erika Gottfried/NY/FRS@FRS, GerardDages/NY/FRS@FRS, Jim Mahoney/NY/FRS@FRS,Jonathan Polk/NY/FRS@FRS, KevinCoffey/NY/FRS@FRS, Mari Baca/NY/FRS@FRS, MarkScapp/NY/FRS@FRS, Min Kim/NY/FRS@FRS, Niall ECoffey/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS,Richard Charlton/NY/FRS@FRS, TobiasAdrian/NY/FRS@FRS, Zoltan Pozsar/NY/FRS@FRS,Michael S Gibson/BOARD/FRS@BOARD, Jon DGreenlee/BOARD/FRS@BOARD

cc

Subject Re: AIG info

Duplicate

BOG-- FOIA 10-251 --000834

From: Patricia MosserTo: Alejandro LaTorreCc: 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; GerardDages; 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


10 pm then?-----------------------------Patricia C. Mosser, FRB-NYSent 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; BardStermasi; Brian Begalle; Catherine Voigts; Christopher Calabia; DanielleVicente; Denise Goodstein; Dianne Dobbeck; Elise Liebers; Erika Gottfried;Gerard Dages; Jim Mahoney; Jon Greenlee; Jonathan Polk; Kevin Coffey; MariBaca; 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: JNellie LiangTo: Michael S GibsonCc: Daniel M Covitz; Gustavo A Suarez; Michael S Gibson; William B EnglishSubject: Re: AIG subs CPDate: 09/15/2008 06:37 PM

Do you know if dealers took any or is it all on AIG?



09/15/2008 06:26 PM

To Gustavo A Suarez/BOARD/FRS@BOARD

cc Daniel M Covitz/BOARD/FRS@BOARD, Gustavo ASuarez/BOARD/FRS@BOARD, JNellieLiang/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD

Subject Re: AIG subs CP

I was on a phone call with FRBNY and NYSID just now, they said AIG's CP did notroll today.

Mike

Duplicate

BOG-- FOIA 10-251 --000836

From: Timothy CarlinTo: NY Bank Sup - LFI CPC Updates@FRSCc: Stephanie Chaly; Linda Rodriguez; Nirali Deringer; Yogesh Shah; Christopher HunterSubject: Barclays Ops UpdateDate: 09/15/2008 06:59 PM

RESTRICTED FR

Barclays Operational UpdateFRBNY: Tim Carlin, Linda Rodriguez, Nirali DeringerBarclays: John Rodefeld US Head of Operations

ThanksTim

(b) (4) and (b) (8)

BOG-- FOIA 10-251 --000837

From: James WallTo: NY Bank Sup - LFI CPC UpdatesCc: William Charwat; Jeanmarie Davis; Brian Begalle; [email protected]: Fw: Consolidated BNYM CPC Team 9/15 RecapDate: 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

BNYM End of Day Updates

Not Responsive

Not Responsive

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

Not Responsive

BOG-- FOIA 10-251 --000839

Not Responsive(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --000840

From: Melissa A VanlandinghamTo: Jeff Stehm; Jeffrey MarquardtSubject: today's updateDate: 09/15/2008 07:43 PMAttachments: Infrastructure Status Report 0915 8PM.doc

Hard copies en route.


BOG-- FOIA 10-251 --000841


Page 1 of 3 1

Monday, September 15th 6:00 PM Infrastructure Status Report Foreign payment and settlement infrastructures

Not Responsive

BOG-- FOIA 10-251 --000842


Page 2 of 3 2

Not Responsive

(b) (4)

Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000843


Page 3 of 3 3

Not Responsive

BOG-- FOIA 10-251 --000844




Subject: DB September 15, 2008 Credit Risk Management Update 2Date: 09/15/2008 07:57 PM

**Restricted FR**

Prepared by Tai Wondwosen and Moses Cheng

Not Responsive

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

Not Responsive

BOG-- FOIA 10-251 --000845

*************************************Moses Cheng, CFA, FRMFederal Reserve Bank of New York212-720-1433212-250-6075

Not Responsive

BOG-- FOIA 10-251 --000846

From: Kevin WarshTo: Donald L KohnCc: Michelle A SmithSubject: AIGDate: 09/15/2008 08:05 PM

Received report tonight on capital hole at AIG; far worse than expected; hole too bigto be filled, according to . Not good.

(b) (6)

(b) (4)

BOG-- FOIA 10-251 --000847

From: Michelle A SmithTo: Kevin Warsh; ; Donald L Kohn; Brian F MadiganSubject: Re: AIGDate: 09/15/2008 08:25 PM

Just spoke to TFG.

▼ Kevin Warsh

----- Original Message ----- From: Kevin Warsh Sent: 09/15/2008 08:05 PM EDT To: Donald Kohn Cc: Michelle Smith

(b) (6)

(b) (6)

Duplicate

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

BOG-- FOIA 10-251 --000848

From: Rita C ProctorTo:Subject: Fw: Foreign Bank Supervisors callDate: 09/15/2008 08:30 PM


09/15/2008 07:19 PM

To Rita C Proctor/BOARD/FRS@BOARD, Randall SKroszner/BOARD/FRS@BOARD, Elizabeth ADuke/BOARD/FRS@BOARD, Donald LKohn/BOARD/FRS@BOARD, KevinWarsh/BOARD/FRS@BOARD

cc Scott Alvarez/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD

Subject Foreign Bank Supervisors call

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000849

From: Melissa A VanlandinghamTo: Jeff Stehm; Jeffrey MarquardtSubject: lehman update draftDate: 09/15/2008 08:33 PMAttachments: Infrastructure Status Report 0915 830PM.doc


BOG-- FOIA 10-251 --000850


Page 1 of 3 1

Monday, September 15th 8:30 PM Infrastructure Status Report Not Responsive

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

Not Responsive

BOG-- FOIA 10-251 --000851


Page 2 of 3 2

Not Responsive

BOG-- FOIA 10-251 --000852


Page 3 of 3 3

Not Responsive

BOG-- FOIA 10-251 --000853

From: Brian F MadiganTo: Michelle A SmithCc: Donald L Kohn; ; Kevin Warsh; Scott AlvarezSubject: Re: AIGDate: 09/15/2008 08:47 PM

Here are my thoughts.



09/15/2008 08:25 PM

To Kevin Warsh/BOARD/FRS@BOARD, Donald L

Kohn/BOARD/FRS@BOARD, Brian FMadigan/BOARD/FRS@BOARD

cc

Subject Re: AIG

(b) (6)

(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000854

From: Michelle A SmithTo: Brian F MadiganCc: Donald L Kohn; ; Kevin Warsh; Scott AlvarezSubject: Re: AIGDate: 09/15/2008 08:59 PM

Latest...

-m▼ Brian F Madigan

----- Original Message ----- From: Brian F Madigan Sent: 09/15/2008 08:47 PM EDT To: Michelle Smith Cc: Donald Kohn; Kevin Warsh; Scott Alvarez Subject: Re: AIG

Here are my thoughts.

(b) (6)

(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000855

From: Patrick M ParkinsonTo: JNellie LiangSubject: Re: Fw: Difficulties with money fund redemptionsDate: 09/15/2008 09:03 PM

No, but no surprise there. Pat

----- Original Message -----From: JNellie.LiangSent: 09/15/2008 09:00 PM ASTTo: Patrick ParkinsonSubject: Re: Fw: Difficulties with money fund redemptions

thanks.

I assume you heard that AIG's CP did not roll today.

Nellie

[email protected]/15/2008 08:36 "Brian Madigan"PM <[email protected]>, "Nellie

Liang"<[email protected]>

cc

SubjectFw: Difficulties with money fundredemptions

Fyi.

----- Original Message -----From: David.MarshallSent: 09/15/2008 08:37 PM ASTTo: Pat White; Patrick Parkinson; Patricia MosserSubject: Difficulties with money fund redemptions

Not Responsive

BOG-- FOIA 10-251 --000856

From: Brian F MadiganTo: Michelle A SmithCc: Donald L Kohn; ; Kevin Warsh; Scott Alvarez; Brian F MadiganSubject: Re: AIGDate: 09/15/2008 09:05 PM

Scott and I just spoke by phone.



09/15/2008 08:59 PM


cc Donald L Kohn/BOARD/FRS@BOARD, Kevin

Warsh/BOARD/FRS@BOARD, ScottAlvarez/BOARD/FRS@BOARD

Subject Re: AIG

(b) (6)

(b) (6)

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000857

From: Scott AlvarezTo: Michelle A SmithSubject: Re: AIGDate: 09/15/2008 09:06 PM

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; ; Kevin Warsh; Scott Alvarez(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000858

From: Michelle A SmithTo: Donald L Kohn; Kevin Warsh; Brian F Madigan; Scott AlvarezSubject: S and P cuts AIG's credit rating...Date: 09/15/2008 09:26 PM

NEWS ALERTfrom The Wall Street JournalSept. 15, 2008

Monday evening, Standard & Poor's cut AIG's credit rating by three notches. Thedowngrade 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 andExchange Commission in August. It is not clear how quickly AIG would have toproduce those funds, but if it fails to do so, it risks defaulting on its agreements withthose counterparties.

(b) (6)

BOG-- FOIA 10-251 --000859

From: Donald L KohnTo: Scott Alvarez; Patrick ParkinsonSubject: Fw: AIGDate: 09/15/2008 09:38 PM

--------------------------Sent from my BlackBerry Wireless Handheld▼ Kevin Warsh

----- Original Message ----- From: Kevin Warsh Sent: 08:05 PM EDT To: Donald Kohn Cc: Michelle Smith Subject: AIG

(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000860

From: Coryann StefanssonTo: Brian PetersSubject: What was the outcome of the aig meeting?Date: 09/15/2008 11:58 PM

Coryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # (b) (6)

BOG-- FOIA 10-251 --000861

From: Coryann StefanssonTo: Brian PetersSubject: Re: What was the outcome of the aig meeting?Date: 09/16/2008 12:09 AM

Any...starved for info :)Coryann StefanssonAssociate DirectorBank Supervision and RegulationWork # 2Cell #

----- Original Message -----From: Brian PetersSent: 09/16/2008 12:12 AM EDTTo: Coryann StefanssonSubject: Re: What was the outcome of the aig meeting?

Our internal discussion or the industry? Both still ongoing to my knowledge.

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000862

From: Coryann StefanssonTo: Brian PetersSubject: Re: What was the outcome of the aig meeting?Date: 09/16/2008 12:21 AM

Coryann StefanssonAssociate DirectorBank Supervision and RegulationWork # 2Cell #

----- Original Message -----From: Brian PetersSent: 09/16/2008 12:17 AM EDTTo: Coryann StefanssonSubject: Re: What was the outcome of the aig meeting?

We are still debating with TFG. A group with Dianne and Stev and wlrdirecting are estimating the economic effects on the market. Some bankersseem to still be downstarirs as tFG keeps popping out.

----- Original Message -----From: Coryann StefanssonSent: 09/16/2008 12:09 AM EDTTo: Brian PetersSubject: Re: What was the outcome of the aig meeting?

(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000863

Coryann StefanssonAssociate DirectorBank Supervision and RegulationWork # Cell # (b) (6)

BOG-- FOIA 10-251 --000864

From: [email protected]: [email protected]; [email protected]; [email protected];

[email protected]; [email protected]; [email protected]; [email protected]: Fw: Use of existing AuthorityDate: 09/16/2008 12:47 AMAttachments: Use of existing Authority.doc

From: Bob Hoyt To: Hoyt, Robert Sent: Tue Sep 16 00:43:26 2008Subject: Use of existing Authority

····· - Use of existing Authority.doc

(b) (5)

BOG-- FOIA 10-251 --000865

(b) (5)

BOG-- FOIA 10-251 --000866

From:Sent By:To: [email protected]: Few thingsDate: 09/16/2008 06:05 AM

It seems many in the market were not at all prepared for Lehman to go under. Mostexpected some form of takeover or bail out (maybe not the most irrational of beliefsgiven Bear Stearns and the potential for serious systemic risk).

A lot of funds facing Lehman have seen significant losses incurred on collateral onrepo’s, swaps, etc. There are also many with uncertain overall positions as a result ofuncertainty over current trades with Lehman.

Given that the UShas now showed a willingness to let a major institution fail, there iswidespread concern about many other names, and an increasing unwillingness tolend or trade with other counterparties.

I have heard a number of funds raise concerns about whether the Merrill/BoA dealwith conclude (people who’ve just incurred serious losses on Lehman exposures areinclined to take a negative view of things).

Similarly AIG is causing high concern – the extent of losses which would betransmitted 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.

(b) (4)

BOG-- FOIA 10-251 --000867

Credit spreads across the board are continuing to blow out, and liquidity is extremelypoor.

The very very high risk decision to let Lehman fail seems to be triggering a loss ofconfidence in policy makers ability to understand or fix the current problems (at leastin the US). If this runs much further or there are other major defaults this situationcould be difficult to pull back.

I would not rule out the need for the US or even G7 to issue a generalized guaranteeon all senior bank obligations if this situation gets further out of hand to prevent amajor 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: Michelle A Smith; Kevin WarshSubject: Re: S and P cuts AIG's credit rating...Date: 09/16/2008 06:19 AM

--------------------------Sent from my BlackBerry Wireless Handheld▼ Michelle A Smith

----- Original Message ----- From: Michelle A Smith Sent: 09/15/2008 09:26 PM EDT To: ; Donald Kohn; Kevin Warsh; Brian Madigan; ScottAlvarez Subject: S and P cuts AIG's credit rating...

NEWS ALERTfrom The Wall Street JournalSept. 15, 2008

Monday evening, Standard & Poor's cut AIG's credit rating by threenotches. The downgrade means that AIG's counterparties can demandthat it post an additional $11.6 billion in collateral, according to a filingAIG made with the Securities and Exchange Commission in August. Itis not clear how quickly AIG would have to produce those funds, but ifit fails to do so, it risks defaulting on its agreements with thosecounterparties.

(b) (6)

(b) (6)

(b) (5)

BOG-- FOIA 10-251 --000869

From: Kevin WarshTo: Donald L KohnSubject: Fw: S and P cuts AIG's credit rating...Date: 09/16/2008 06:28 AM

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

----- Original Message -----From: Sent: 09/16/2008 06:19 AM ASTTo: Michelle Smith; Kevin WarshSubject: Re: S and P cuts AIG's credit rating...

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000870

From: Donald L KohnTo: Kevin WarshSubject: Re: S and P cuts AIG's credit rating...Date: 09/16/2008 06:37 AM

We already were supposed to have an u ure thatgets scheduled and that bb is on it.


----- Original Message -----From: Kevin.WarshSent: 09/16/2008 06:28 AM ASTTo: Donald KohnSubject: Fw: S and P cuts AIG's credit rating...


----- age -----From: Sent: 09/16/2008 06:19 AM ASTTo: Michelle Smith; Kevin WarshSubject: Re: S and P cuts AIG's credit rating...

(b) (6)

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

Duplicate

BOG-- FOIA 10-251 --000871

From: Michelle A SmithTo:Subject: Fw: S and P cuts AIG's credit rating...Date: 09/16/2008 06:39 AM

BB would like to get an update before thew mtg. Do ypu want me toput tgether a 5 min call at 8 or 815?Good luck.

▼

----- Original Message ----- From: Sent: 09/16/2008 06:19 AM EDT To: Michelle Smith; Kevin Warsh

(b) (6)

(b) (6)

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000872

From: Michelle A SmithTo:Subject: Re: S and P cuts AIG's credit rating...Date: 09/16/2008 06:53 AM

Done ▼

----- Original Message ----- From: Sent: 09/16/2008 06:19 AM EDT To: Michelle Smith; Kevin Warsh Subject: Re: S and P cuts AIG's credit rating...

(b) (6)

(b) (6)

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000873

From:Sent By:To: [email protected]: problemDate: 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 causingleverage to unwind in a disorderly manner. Many funds/corporates/hedge funds can’twork out their positions and are scrambling to replace naked exposures created bythe failure. There seem to be differences in treatment for the unwind depending oninstruments, 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 rateassumptions as more failures are considered.

Most important is the collapse in confidence in the policymaker community amongmarket 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 movingtowards short dated government bonds and avoiding bank exposure (in every way amajor run on the banking system).

There may well be a need to issue a general guarantee on bank obligations in themanner the Scandanavian’s did in 2002 and the UK did for a short period during

(b) (4)

BOG-- FOIA 10-251 --000874

Northern Rock’s collapse to prevent the payments system collapsing in the next fewhours.

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000875

From: Margaret OwensTo: Kevin WarshSubject: Fw: Few thingsDate: 09/16/2008 07:40 AM

----- Forwarded by Margaret Owens/BOARD/FRS on 09/16/2008 07:39 AM -----

09/16/2008 06:35 AM

To <[email protected]>

cc

Subject Few things

Hi – would you be able to pass this to Gov Warsh for me please? Thanks,

It seems many in the market were not at all prepared for Lehman to go under. Mostexpected some form of takeover or bail out (maybe not the most irrational of beliefsgiven Bear Stearns and the potential for serious systemic risk).

A lot of funds facing Lehman have seen significant losses incurred on collateral onrepo’s, swaps, etc. There are also many with uncertain overall positions as a result ofuncertainty over current trades with Lehman.

Given that the US has now showed a willingness to let a major institution fail, there iswidespread concern about many other names, and an increasing unwillingness tolend or trade with other counterparties.

I have heard a number of funds raise concerns about whether the Merrill/BoA dealwith conclude (people who’ve just incurred serious losses on Lehman exposures areinclined to take a negative view of things).

Similarly AIG is causing high concern – the extent of losses which would betransmitted 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.

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000876

Credit spreads across the board are continuing to blow out, and liquidity is extremelypoor.

The very very high risk decision to let Lehman fail seems to be triggering a loss ofconfidence in policy makers ability to understand or fix the current problems (at leastin the US). If this runs much further or there are other major defaults this situationcould be difficult to pull back.

I would not rule out the need for the US or even G7 to issue a generalized guaranteeon all senior bank obligations if this situation gets further out of hand to prevent amajor 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: Patrick E McCabeTo: Patrick DwyerSubject: AIG & MMFs?Date: 09/16/2008 07:47 AM

Patrick:

Any news on the AIG situation as it affects MMFs?

-Patrick

▼ Patrick Dwyer/NY/FRS@FRS

PatrickDwyer/NY/FRS@FRS

09/15/2008 02:35 PM

To Patrick E McCabe/BOARD/FRS@BOARD

cc

Subject Fw: dmm for pm

from our 1:30 rundown:

----- Forwarded by Patrick Dwyer/NY/FRS on 09/15/2008 02:34 PM -----

PatrickDwyer/NY/FRS

09/15/2008 01:23 PM

To Kenneth Forgit/NY/FRS, Matthew Lieber/NY/FRS, JasonMiu/NY/FRS, Michelle Steinberg/NY/FRS

cc Steven Friedman/NY/FRS@FRS, PeggyKauh/NY/FRS@FRS, NY MKT DMM Staff, Seth BCarpenter/BOARD/FRS@BOARD

Subject dmm for pm

(b) (5)

Not Responsive

BOG-- FOIA 10-251 --000878

Not Responsive

BOG-- FOIA 10-251 --000879

From: JNellie LiangTo: Gustavo A Suarez; Daniel M CovitzSubject: Re: AIG subs CPDate: 09/16/2008 07:56 AM

I suspect that AIG's CP backup lines have MAC clauses, and that AIG now has aserious problem. I would like to consolidate the info you have put together on AIG'sprograms and give a short memo to BB today. Let's get the story about any ratespaid on their CP yesterday.

Nellie



09/15/2008 07:21 PM

To JNellie Liang/BOARD/FRS@BOARD

cc


They didn't say. It is my understanding that the CP has bank backup lines, thoughthe ABCP does not.

Mike

▼ JNellie Liang/BOARD/FRS

JNellieLiang/BOARD/FRS

09/15/2008 06:37 PM


cc Daniel M Covitz/BOARD/FRS@BOARD, Gustavo ASuarez/BOARD/FRS@BOARD, Michael SGibson/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD


Duplicate

BOG-- FOIA 10-251 --000880

From: JNellie LiangTo: Gustavo A SuarezCc: Daniel M Covitz; Gustavo A Suarez; Michael S Gibson; JNellie LiangSubject: Re: AIG subs CPDate: 09/16/2008 08:03 AM

Gustavo,If I have it right by combining this info with previous data, AIG and subs have sixprograms with $17.9 billion. $6 billion or one-third is due to mature in 7 days (5business days?). Mike tells us that NY said that their paper did not roll yesterday.

Nellie ▼ Gustavo A Suarez/BOARD/FRS


09/15/2008 05:25 PM



Subject AIG subs CP

Duplicate

BOG-- FOIA 10-251 --000881

From: Roberto PerliTo: Brian F MadiganCc: James A Clouse; William B English; William R Nelson; Seth B CarpenterSubject: liquidity conditions yesterday from CPCsDate: 09/16/2008 08:05 AM

This is a brief summary of what FRBNY's CPC teams learned about liquidityconditions yesterday from their respective institutions.

Money Funds noted that one fund--Reserve

Funds--had a large amount of Lehman and AIG exposure and will probably ‘breakthe buck’ (trade below $1) and need to be acquired by an outside party.

Not Responsive

Not Responsive(b)(4) & (b)(8)

BOG-- FOIA 10-251 --000882

From: James A ClouseTo: Deborah P Bailey; Coryann StefanssonSubject: Fw: liquidity conditions yesterday from CPCsDate: 09/16/2008 08:08 AM

Just FYI...Interesting note on the money fund situation....easier to understand whythose funds were experiencing major redemption requests! Jim

[email protected]: blackberry: 202-390-3521----- Forwarded by James A Clouse/BOARD/FRS on 09/16/2008 08:08 AM -----


09/16/2008 08:05 AM


cc James A Clouse/BOARD/FRS@BOARD, William BEnglish/BOARD/FRS@BOARD, William RNelson/BOARD/FRS@BOARD, Seth BCarpenter/BOARD/FRS@BOARD

Subject liquidity conditions yesterday from CPCs

(b) (6)

Duplicate

BOG-- FOIA 10-251 --000883

From: Coryann StefanssonTo: James A Clouse; Deborah P BaileySubject: Re: liquidity conditions yesterday from CPCsDate: 09/16/2008 08:29 AM

Hey

Thanks for the forward. I just want to put a caveat out that

CoryCoryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # ▼ James A Clouse

----- Original Message ----- From: James A Clouse Sent: 09/16/2008 08:08 AM EDT To: Deborah Bailey; Coryann Stefansson Subje

----- Forwar

(b) (6)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000884

From: Meg McConnellTo: Patrick M Parkinson; Beverly HirtleSubject: Re: Fw: legislative agendaDate: 09/16/2008 08:34 AM

Margaret M. McConnellFederal Reserve Bank of New York212-720-8773▼ 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 seenwhat they produced. Meg is likely to know more.

Pat▼ Beverly Hirtle/NY/FRS@FRS

BeverlyHirtle/NY/FRS@FRS

09/16/2008 08:22 AM


cc Meg McConnell/NY/FRS

Subject Fw: legislative agenda

Pat,

I volunteered to help organize FRBNY participation on these efforts. Is theresomeone I could talk to (you?) for a few minutes to get some more informationabout what's going on? Thanks.

Bev

Beverly HirtleSenior Vice PresidentFinancial Intermediation FunctionFederal 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

09/15/2008 02:07 PM

To Beverly Hirtle/NY/FRS@FRS

cc


Hi Bev, I haven't had a chance to look through this yet, but here is what Pat forwarded

(b) (5)

BOG-- FOIA 10-251 --000885

me on this. I guess this question is how/who at FRBNY could work on some orall of these with Board staff in the near-term. Some of it we may have alreadythought through in some form or another. Meg

----- Forwarded by Meg McConnell/NY/FRS on 09/15/2008 01:59 PM -----

[email protected]

09/15/2008 09:07 AM

To "Meg McConnell" <[email protected]>

cc


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 -----

DonaldL Kohn/BOARD/FRS To

01:34

PM cc [email protected],Kevin Warsh/BOARD/FRS@Board,Scott Alvarez/BOARD/FRS@Board,Timothy Geithner/NY/FRS@FRS, DonaldL Kohn/BOARD/FRS Subject Re: legislativeagenda(Document link: Donald LKohn)

cleaned up 1c. along the lines Ben suggested.

(See attached file: Possible Legislative Proposals.doc)

(b) (6)(b) (6)

BOG-- FOIA 10-251 --000886

To 09/14/2008 01:23 Donald LKohn/BOARD/FRS@BOARD PM cc [email protected], DonaldL Kohn/BOARD/FRS@BOARD,Kevin Warsh/BOARD/FRS@BOARD,Scott Alvarez/BOARD/FRS@BOARD,Timothy Geithner/NY/FRS@FRS Subject Re: legislativeagenda(Document link: Donald LKohn)

Thanks.

DonaldL Kohn/BOARD/FRS To

:14

PM KevinWarsh/BOARD/FRS@BOARD, TimothyGeithner/NY/FRS@FRS cc [email protected],Scott Alvarez/BOARD/FRS@BOARD, DonaldL Kohn/BOARD/FRS Subject legislativeagenda

(b) (6)

(b) (6)(b) (6)

(b) (5)

BOG-- FOIA 10-251 --000887

here's my list of possible legislation.

[attachment "Possible Legislative Proposals.doc" deleted by Donald LKohn/BOARD/FRS]

[attachment "Possible Legislative Proposals.doc" deleted by Meg McConnell/NY/FRS]

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

BOG-- FOIA 10-251 --000888

From: Michael S GibsonTo: Gustavo A SuarezSubject: Re: AIG subs CPDate: 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 negativeoutlook:

AIG Capital Corporation -- short-term issuer rating to Prime 2 from Prime1;

American General Finance Corporation -- short-term debt to Prime 2from Prime-1;

American General Finance, Inc. -- short-term debt to Prime-2 fromPrime-1;

CommoLoco, Inc. -- backed short-term debt to Prime-2 from Prime-1;

International Lease Finance Corporation -- short-term debt to Prime-2from Prime-1.

Moody's has placed the following ratings on review for possibledowngrade:

American International Group, Inc. -- short-term issuer rating at Prime-1;

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 strengthat 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


09/15/2008 05:25 PM



Subject AIG subs CP

Duplicate

BOG-- FOIA 10-251 --000890

From: Scott AlvarezTo: Robert HoytSubject: Re: Use of existing AuthorityDate: 09/16/2008 08:55 AMImportance: High

Bob

Thanks! Scott--------------------------Sent from my BlackBerry Wireless Handheld

From: Robert.Hoyt Sent: 09/16/2008 12:47 AM AST To: [email protected]; [email protected]; [email protected];[email protected]; [email protected]; Scott Alvarez; Timothy Geithner Subject: Fw: Use of existing Authority

From: Bob Hoyt To: Hoyt, Robert Sent: Tue Sep 16 00:43:26 2008Subject: Use of existing Authority

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000891

From: JNellie LiangTo: Daniel M Covitz; Gustavo A SuarezSubject: draftDate: 09/16/2008 08:55 AMAttachments: AIG.cp.091608.doc

BOG-- FOIA 10-251 --000892

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000893

From: Kevin WarshTo:Subject:Date: 09/16/2008 08:56 AM

In fomc meeting by can u email me your views on the liquidity need and capitalneed by aig. Want to make sure treas has clear understanding of difference----------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

(b) (5)

BOG-- FOIA 10-251 --000894

From: [email protected]: [email protected]: Re: Use of existing AuthorityDate: 09/16/2008 08:56 AM

From: [email protected] To: Hoyt, Robert Sent: Tue Sep 16 08:55:43 2008Subject: Re: Use of existing Authority

Bob

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000895

From: Jon D GreenleeTo: Sabeth I Siddique; James Embersit; Nina Nichols; Adrienne HadenSubject: Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte) Date: 09/16/2008 09:02 AM



09/16/2008 08:52 AM

To NY Banksup LFI CPC

cc Jennifer Burns/RICH/FRS@FRS, Lisa A White, Nancy RBerlad/BOARD/FRS@BOARD

Subject Fw: Briefing email: BAC - Overview of Enterpriseactions (7.30am meeting Senior Enterprise ExecutiveCmte)

Briefing email: BAC - Overview of Enterprise actions (Meeting Senior EnterpriseExecutive Cmte)

7.30am Key Contacts: Arrington Mixon, Ed O'Keefe

Best Regards,Brad EvansFederal Reserve

Not Responsive

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

BOG-- FOIA 10-251 --000896

From: JNellie LiangTo: Daniel M Covitz; Gustavo A SuarezSubject: revised draftDate: 09/16/2008 09:04 AMAttachments: 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: Kevin WarshTo: Michelle A SmithSubject:Date: 09/16/2008 09:13 AM


(b) (5)

BOG-- FOIA 10-251 --000900

From: Michelle A SmithTo: Calvin MitchellSubject:Date: 09/16/2008 09:19 AM

(b) (5)

BOG-- FOIA 10-251 --000901

From: [email protected]: Marsha Takagi; Jeanmarie Davis; [email protected]; [email protected];

[email protected]; Jeffrey Marquardt; Theodore Lubke; Jeff Stehm; Roger Graham;[email protected]

Subject: Today's outlook for CLSDate: 09/16/2008 09:23 AM

FR Restricted:

I hope to get another update in an hour after the Citi talks.

Thanks.-----------------Sent from my BlackBerry Handheld.

Not Responsive

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

BOG-- FOIA 10-251 --000902

From: Kevin WarshTo: [email protected]: In fomc mtgDate: 09/16/2008 09:31 AM

Dan

Thx

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

(b) (5)

BOG-- FOIA 10-251 --000903

From: [email protected]: [email protected]: Re: In fomc mtgDate: 09/16/2008 09:44 AM

----- Original Message -----From: [email protected] <[email protected]>To: Jester, Dan (Contractor)Sent: Tue Sep 16 09:31:20 2008Subject: In fomc mtg

Dan

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000904

From: Rich AshtonTo: Mark VanDerWeide; Sophia H AllisonSubject: Resolution attachedDate: 09/16/2008 09:50 AMAttachments: AIG resolution II.doc

BOG-- FOIA 10-251 --000905

(b) (5)

BOG-- FOIA 10-251 --000906

From:To: [email protected]: Re:Date: 09/16/2008 09:54 AM

Market in distress. AIG is creating fear. Banks stopping taking names. CDS much wider.

----- Original Message -----From: Kevin [email protected] <[email protected]>To:Sent: Tue Sep 16 09:35:05 2008

Mkt developments this am pls by emal----------------------------------------------------------------------------------Sent from my BlackBerry Wireless Handheld

(b) (4)

(b) (4)

BOG-- FOIA 10-251 --000907

From: Jack JenningsTo: Coryann StefanssonSubject: Re: Fw: AIG & Identifying other firms under stressDate: 09/16/2008 09:57 AM

are you on call, they are reviewing the aig info with foreign supervisors

Jack P. Jennings, IIAssociate DirectorInternational Supervision, Training and AssistanceDivision of Banking Supervision and RegulationPhone: (202) 452-3053Fax: (202) 452-2770Email: [email protected]


CoryannStefansson/BOARD/FRS

09/15/2008 10:34 PM

To Jack Jennings/BOARD/FRS@BOARD

cc

Subject Fw: AIG & Identifying other firms under stress

Duplicate

BOG-- FOIA 10-251 --000908

From: Kevin WarshTo: Dan JesterSubject: Re: In fomc mtgDate: 09/16/2008 09:58 AM

Is it your view tha?


From: Dan.Jester Sent: 09/16/2008 09:44 AM AST To: Kevin Warsh Subject: Re: In fomc mtg

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000909

From: Daniel M CovitzTo: JNellie LiangCc: Gustavo A SuarezSubject: cp memoDate: 09/16/2008 09:58 AMAttachments: AIG.cp.091608.dmc.gs.doc

Nellie,

Nice memo. We put in some edits and updated facts. Changes are tracked, soplease accept or reject them before sending.

Dan and Gustavo

BOG-- FOIA 10-251 --000910

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000911

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000912

From: Mike CollinsTo: Jon D Greenlee; Deborah P Bailey; Roger ColeCc: Susan V FoleySubject: Fw: Summary of actions for Lehman Brothers FSB and AIG FSBDate: 09/16/2008 10:07 AM

FYI

Michael E. CollinsSenior Vice President and Lending OfficerFederal Reserve Bank of Philadelphia215-574-4142215-574-3943 (fax)----- Forwarded by Mike Collins/PHIL/FRS on 09/16/2008 10:05 AM -----

Gail Todd/PHIL/FRS

09/16/2008 09:29 AM

To Mike Collins/PHIL/FRS@FRS, VishViswanathan/PHIL/FRS@FRS

cc

Subject Summary of actions for Lehman Brothers FSB and AIGFSB

Restricted - FR

Lehman Brothers FSB

Not Responsive

BOG-- FOIA 10-251 --000913

Not Responsive

BOG-- FOIA 10-251 --000914

AIG FSB -

Brief Profile:As of 6/30/08:Total Assets $1.2 bilTotal Deposits $1.1 bil

Discount Window documents - however, no collateral

DLOD Cap Deminimus Capacity $57 mil Avg Peak DLOD $ 3 thousand Peak DLOD $28 thousand

Account Activity:

A

Please let me know if you need any additional information.Gail

(b) (8)

(b) (4)

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

Not Responsive

BOG-- FOIA 10-251 --000915

From: Tim P ClarkTo: Deborah P BaileyCc: Jon D GreenleeSubject: Re: AIG -monolines/guarantorsDate: 09/16/2008 10:22 AM

AIG has sold a lot of protection that is similar to the type of protection theguarantors sold -- 'super senior' protection against CDOs. They sold $80 billion of'multi-sector' CDO protection, which includes the ABS CDO type stuff the guarantorsdid and had taken MTM losses of $27 billion against that as of August. As ofAugust, they had posted $16 billion of collateral against these MTM losses, leaving$10 billion open exposure at counterparties. They also have a large book ofcorporate CDO related CDS protection sold and given what spreads aredoing this isno doubt causing some MTM losses -- and growing exposures at banks -- as well.▼ Deborah P Bailey/BOARD/FRS


09/16/2008 10:09 AM

To Tim P Clark/BOARD/FRS@BOARD


Subject AIG -monolines/guarantors

Tim, was AIG big in this? I can't remember. If you have any insightsplease provide to Jon. I have asked him to be the point on this. thanks

BOG-- FOIA 10-251 --000916

From: Kieran FallonTo: Scott Alvarez; [email protected]: Outline of Emergency Resolution and Funding AuthorityDate: 09/16/2008 10:36 AMAttachments: Nonbank Financial Firm Resolutions (Sept. 16, 2008 v2).doc

Kieran J. FallonAssistant General CounselBoard of Governors of the Federal Reserve System20th Street & Constitution Ave., N.W.Washington, D.C. 20551Tel: 202-452-5270Fax: 202-452-3101

BOG-- FOIA 10-251 --000917

(b) (5)

BOG-- FOIA 10-251 --000918

(b) (5)

BOG-- FOIA 10-251 --000919

(b) (5)

BOG-- FOIA 10-251 --000920

(b) (5)

BOG-- FOIA 10-251 --000921

(b) (5)

BOG-- FOIA 10-251 --000922

(b) (5)

BOG-- FOIA 10-251 --000923

(b) (5)

BOG-- FOIA 10-251 --000924

From: William JohnsonTo: 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; CarolineNuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; ClaudiaFranco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; Deborah Lohnau; DexterWilliams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; Jan Voigts; JaneWakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; John Harvey; JohnHeinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; Joshua Sherwin; JudithJ 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; LuisUranga; 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; SarahDahlgren; Stephanie Chaly; Steven J Manzari; Steven Mirsky; Susan G Ballinger; Susan Goldberg; TheodoreLubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; Wendy Ng; WilliamBRODOWS; William Hallacy; Wing Oon

Cc: Todd Waszkelewicz; Che Sidanius; Jeremy Gagne; Emily BradleySubject: CLS 9/16 update - morningDate: 09/16/2008 10:54 AM

CLS Update - Tuesday 9/16/08 morning

William JohnsonFederal Reserve Bank of New York212-720-2393

Not Responsive

Not Responsive

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

BOG-- FOIA 10-251 --000925

From: Fang DuTo: BSR Credit Risk@BOARDCc: Jon D GreenleeSubject: Banks linked to $75 billion lending facility after AIG rating downgradeDate: 09/16/2008 11:04 AM

AIG had its key credit rating downgraded by all three major ratingagencies after receiving a $20 billion lifeline from New York insuranceregulators. The insurer is also working to secure a lending facilityarranged by JPMorgan Chase and Goldman Sachs of as much as $75billion, a crucial step in light of the downgrade, which has the potential totrigger substantial collateral payments on AIG's numerous credit-derivative trades. Standard & Poor's warned that AIG's credit ratingcould be reduced even more if it is not able to "implement furtherliquidity options" and "the successful sale of at least a portion of itsbusiness assets."

Best Regards,

Fang DuBS&R, Federal Reserve Board(202) 872 - 4971 or (401) 789 -1194

[email protected](b) (6)

BOG-- FOIA 10-251 --000926

From: Betsy GordonTo: NY Bank Sup - LFI CPC Updates@FRSCc: [email protected]; Christopher HunterSubject: payments-settlement ..updateDate: 09/16/2008 11:15 AM

Not Responsive

Not Responsive

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

BOG-- FOIA 10-251 --000927

Regards,

Betsy H. GordonFederal Reserve Bank of New York: 1 (212) 720-2257UBS 203 719-7389Blackberry (b) (6)

Not Responsive

BOG-- FOIA 10-251 --000928

From: Daniel M CovitzTo: JNellie LiangCc: Gustavo A SuarezSubject: cp memoDate: 09/16/2008 11:21 AMAttachments: AIG.cp.091608.dmc.gs.doc

Nellie,

Dan and Gustavo

(b) (5)

BOG-- FOIA 10-251 --000929

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000930

(b) (4) and (b) (5)

BOG-- FOIA 10-251 --000931

From: Renuka VijayanathanTo: 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; CatherineVoigts; Chris Haley; Christina Zausner; Christine E Schwaninger; Christopher Calabia; Claudia Franco; ClintonLively; 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; JohnRicketti; 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; RichardKunen; 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

Cc: Randolph Brown; Kenton Beerman; Glen Reppy; Bin Lang; Catherine A TilfordSubject: SG- 9/16 liquidity update 10.30amDate: 09/16/2008 11:25 AMAttachments: Not Responsive

Not Responsive

BOG-- FOIA 10-251 --000932

Not Responsive

Not Responsive

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

BOG-- FOIA 10-251 --000933

Not Responsive

BOG-- FOIA 10-251 --000934

Not Responsive

BOG-- FOIA 10-251 --000935

Not Responsive

BOG-- FOIA 10-251 --000936

Not Responsive

BOG-- FOIA 10-251 --000937

From: John AmmerTo: Mark CareyCc: Sally M DaviesSubject: Re: Fw: International ramifications of an AIG failure - poking a bit more at the 10-KDate: 09/16/2008 11:27 AM

Mark:

I have the reporting-segment balance sheet information (Note 2) and informationabout 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 parent-sub or sub-sub.

AIGFP had $115 billion in end-'07 assets and was involved to at least some extent inoffering CDS protection on CDO tranches.

About 28% of the group's half-trillion dollar bond porttfolio was in the MBS/ABScategory, with Fair Value stated as just a few percent below Cost.

-John

▼ Mark Carey/BOARD/FRS

MarkCarey/BOARD/FRS

09/15/2008 05:53 PM

To Sally M Davies/BOARD/FRS@BOARD, JohnAmmer/BOARD/FRS@BOARD

cc

Subject Fw: International ramifications of an AIG failure

I wrote the email below in response to a question raised at a meetingearlier today.

Mark CareyAdviserDivision of International FinanceFederal Reserve BoardWashington, DC 20551 USA(202) 452-2784 voice(202) 872-4926 [email protected] email

----- Forwarded by Mark Carey/BOARD/FRS on 09/15/2008 05:52 PM -----

MarkCarey/BOARD/FRS

09/15/2008 05:29 PM

To IF Officers and Section Chiefs

cc

Subject International ramifications of an AIG failure

DuplicateBOG-- FOIA 10-251 --000938

From: Coryann StefanssonTo: Deborah P Bailey; BSR LIG; Roger Cole; Norah Barger; William English; Brian PetersSubject: Fw: Citi - AIGDate: 09/16/2008 11:32 AM

Coryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell #

▼ Brian Peters

----- Original Message ----- From: Brian Peters Sent: 09/16/2008 11:19 AM EDT To: Coryann Stefansson; Terrence Checki Subject: Fw: Citi - AIG

▼ William Hallacy

----- Original Message ----- From: William Hallacy Sent: 09/16/2008 11:16 AM EDT To: Brian Peters; Dianne Dobbeck; Catherine Voigts; StevenMirsky; Alejandro LaTorre; NY Banksup AIG Monitoring andAnalysis Cc: Antonio Alvarez; Steven Mirsky; Dexter Williams; BridgetHabib; Jordan Pollinger; Kyle Grieser; Brandon Hall; Laxmi Rao Subject: Citi - AIGJust got off phone w/Citi -


(b) (6)

(b) (4) and (b) (8)

(b) (5)

(b) (4) (b) (5) and (b) (8)

BOG-- FOIA 10-251 --000939

From: Rich AshtonTo: [email protected]; Mark VanDerWeide; Sophia H AllisonSubject: Draft memo on authority to make advance attachedDate: 09/16/2008 11:34 AMAttachments: AIG authority to make advance memo.doc

BOG-- FOIA 10-251 --000940

(b) (5)

BOG-- FOIA 10-251 --000941

2

(b) (5)

BOG-- FOIA 10-251 --000942

3 (b) (5)

BOG-- FOIA 10-251 --000943

From: Deborah P BaileyTo: Jon D Greenlee; Brian F Madigan; [email protected]; William R Nelson; William B English; Donald L KohnSubject: Fw: Citi - AIGDate: 09/16/2008 11:34 AM

----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/16/2008 11:33 AM -----


09/16/2008 11:32 AM

To Deborah P Bailey/BOARD/FRS@BOARD, BSR LIG,"Roger Cole" <[email protected]>, "Norah Barger"<[email protected]>, "William English"<[email protected]>, "Brian Peters"<[email protected]>

cc

Subject Fw: Citi - AIG

Duplicate

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

BOG-- FOIA 10-251 --000944

From: William JohnsonTo: 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; BridgetHabib; Caroline Nuffort; Catherine Voigts; Chris Haley; Christina Zausner; Christine E Schwaninger; ChristopherCalabia; Claudia Franco; Clinton Lively; Corbin Long; Coryann Stefansson; Craig Leiby; Daniel Muccia; DeborahLohnau; Dexter Williams; Dianne Dobbeck; H Clay Saylor; Homer Hill; Isabella Lo Piccolo; James Hodgetts; JanVoigts; Jane Wakefield; Jeanmarie Davis; Jeffrey Levine; Jennifer Burns; Jim Mahoney; John Beebe; JohnHarvey; John Heinze; John Ricketti; Jon D Greenlee; Jonathan Polk; Jordan Pollinger; Joseph Galati; JoshuaSherwin; Judith J Gruttman; Kara Sulmasy; Karen Kahrs; Katheryn Van der Celen; Kenton Beerman; KevinClarke; 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; PaulWhynott; 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; SusanGoldberg; Theodore Lubke; Theonilla Lee-Chan; Thomas J O'Keeffe; Tim P Clark; Todd Waszkelewicz; WendyNg; William BRODOWS; William Hallacy; Wing Oon; Jeanmarie Davis

Cc: Todd Waszkelewicz; Che Sidanius; Jeremy Gagne; Emily BradleySubject: CLS update 9/16 11amDate: 09/16/2008 11:37 AM

William JohnsonFederal Reserve Bank of New York212-720-2393

Not Responsive

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

BOG-- FOIA 10-251 --000945

From: Coryann StefanssonTo: Deborah P Bailey; Jennifer BurnsSubject: Fw: Briefing email: BAC - Overview of Enterprise actions (7.30am meeting Senior Enterprise Executive Cmte)Date: 09/16/2008 11:39 AM

Now we know why there is concernCoryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # ▼ 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:

----- Forwarded by Nancy R Berlad/BOARD/FRS on 09/16/2008 10:51 AM -----


09/16/2008 08:52 AM

To NY Banksup LFI CPC

cc Jennifer Burns/RICH/FRS@FRS, Lisa A White, Nancy RBerlad/BOARD/FRS@BOARD

Subject Fw: Briefing email: BAC - Overview of Enterpriseactions (7.30am meeting Senior Enterprise ExecutiveCmte)

(b) (6)

Duplicate

Not Responsive

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

BOG-- FOIA 10-251 --000946

From: Timothy CarlinTo: NY Bank Sup - LFI CPC Updates@FRSCc: Stephanie Chaly; Linda Rodriguez; Yogesh Shah; Nirali Deringer; Carol Roller; Pat Soriano; Christopher Hunter;

Richard KunenSubject: Barclays Ops UpdateDate: 09/16/2008 11:41 AM

RESTRICTED FR

Barclays Ops Update (b)(4) & (b)(8)

BOG-- FOIA 10-251 --000947

From: Bart SimonTo: Elise Liebers; Diane FraserCc: Cynthia L MartinSubject: CS AIG commentaryDate: 09/16/2008 11:41 AMAttachments: CSFB - AIG Commentary - 9-16-2008.pdf

_________________________Bart SimonFederal Reserve Bank of Boston600 Atlantic AvenueBoston, Massachusetts 02210(617) 973-3231

Mailing address:Post Office Box 55882Boston, Massachusetts 02205

BOG-- FOIA 10-251 --000948

(b) (4)

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(b) (4)

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(b) (4)

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From: Michelle A SmithTo: Calvin Mitchell; Thomas Baxter; Scott AlvarezSubject: Re: draft statementDate: 09/16/2008 11:42 AM

From: Calvin.Mitchell Sent: 09/16/2008 11:41 AM AST To: Michelle Smith; Thomas Baxter; Scott Alvarez Subject: draft statement

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000955

From: Sophia H AllisonTo: Rich AshtonCc: Mark VanDerWeide; Scott Alvarez; Kieran Fallon; [email protected]; [email protected]: Re: Draft memo on authority to make advance attachedDate: 09/16/2008 11:46 AMAttachments: AIG authority to make advance memo sha 09162008.doc

Rich,

Some minor edits - I have somewhere the authorities for the last edit on the lastpage where it says [CITES].

Sophia

Attachment: U:\Allison\A\2008\AIG\AIG authority to make advancememo_sha_09162008.doc

▼ Rich Ashton/BOARD/FRS

RichAshton/BOARD/FRS

09/16/2008 11:34 AM

To [email protected], MarkVanDerWeide/BOARD/FRS@BOARD, Sophia HAllison/BOARD/FRS@BOARD

cc

Subject Draft memo on authority to make advance attached

BOG-- FOIA 10-251 --000956

(b) (5)

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(b) (5)

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From: Tim P ClarkTo: Coryann StefanssonCc: Brian Peters; BSR LIG; Deborah P Bailey; Norah Barger; Roger Cole; William EnglishSubject: Re: Fw: Citi - AIGDate: 09/16/2008 11:47 AM



09/16/2008 11:32 AM

To Deborah P Bailey/BOARD/FRS@BOARD, BSR LIG,"Roger Cole" <[email protected]>, "Norah Barger"<[email protected]>, "William English"<[email protected]>, "Brian Peters"<[email protected]>

cc

Subject Fw: Citi - AIG

Duplicate

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

BOG-- FOIA 10-251 --000960




Subject: DB September 16, 2008 Market Risk Management Morning UpdateDate: 09/16/2008 11:49 AM

**Restricted FR**

Prepared by Moses Cheng and Tai Wondwosen

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

BOG-- FOIA 10-251 --000961

*************************************Moses Cheng, CFA, FRMFederal Reserve Bank of New York212-720-1433212-250-6075

BOG-- FOIA 10-251 --000962

From: Rich AshtonTo: [email protected]: Mark VanDerWeide; Sophia H AllisonSubject: Latest resolutionDate: 09/16/2008 11:51 AMAttachments: AIG resolution II.doc

BOG-- FOIA 10-251 --000963

(b) (5)

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From: Scott AlvarezTo: Timothy Geithner; Thomas BaxterSubject: Fw: Latest resolutionDate: 09/16/2008 11:56 AMAttachments: AIG resolution II.doc

Here is to present to the Board afterFOMC. Tim, are you available to update the Board before they vote? We can warnyou when the end of FOMC draws near.Thanks and comments welcome.Scott


----- Original Message -----From: Rich.AshtonSent: 09/16/2008 11:51 AM ASTTo: Scott AlvarezCc: Mark VanDerWeide; Sophia AllisonSubject: Latest resolution

(See attached file: AIG resolution II.doc) - AIG resolution II.doc

(b) (5)

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BOG-- FOIA 10-251 --000966

From: Scott AlvarezTo: Thomas BaxterSubject: AIGDate: 09/16/2008 11:59 AMImportance: High

Tom

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

(b) (5)

BOG-- FOIA 10-251 --000967

From: Calvin MitchellTo: Michelle A SmithCc: Scott Alvarez; Thomas BaxterSubject: Re: draft statementDate: 09/16/2008 12:01 PM

Sorry for the confusion; it's a fast moving target.

▼ Michelle A Smith/BOARD/FRS@BOARD

Michelle ASmith/BOARD/FRS@BOARD

09/16/2008 11:45 AM

To Calvin Mitchell/NY/FRS@FRS, ThomasBaxter/NY/FRS@FRS, ScottAlvarez/BOARD/FRS@BOARD

cc

Subject Re: draft statement

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000968

From: JNellie LiangTo: Donald L Kohn; Kevin Warsh; Randall S Kroszner; Elizabeth A Duke; Rita C ProctorCc: Brian F Madigan; Patrick M Parkinson; JNellie LiangSubject: Update on conditions in the commercial paper marketDate: 09/16/2008 12:03 PMAttachments: AIG.CP.091608.pdf

Attached is a brief memo on conditions in the commercial paper market yesterday.

BOG-- FOIA 10-251 --000969

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BOG-- FOIA 10-251 --000971

From: JNellie LiangTo: Stephen D Oliner; Michael G Palumbo; Karen Dynan; William B English; James A ClouseCc: Daniel M Covitz; Gustavo A SuarezSubject: update on commercial paper marketDate: 09/16/2008 12:06 PMAttachments: AIG.CP.091608.pdf

Brief memo sent to Board on conditions in the commercial paper market yesterday.

BOG-- FOIA 10-251 --000972

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From: Brian PetersTo: Coryann Stefansson; Deborah P Bailey; BSR LIG; Roger Cole; Norah Barger; William B EnglishSubject: Re: Citi - AIGDate: 09/16/2008 12:11 PM

Working to confirm at citi and elsewhere

----- Original Message -----From: Coryann.StefanssonSent: 09/16/2008 11:32 AM ASTTo: Deborah Bailey; [email protected]; Roger Cole; Norah Barger; WilliamEnglish; Brian PetersSubject: Fw: Citi - AIG

Duplicate

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From: Jeff StehmTo: Lisa Joniaux; William Carlucci; Lawrence Sweet; Marsha TakagiCc: Theodore Lubke; Jeffrey Marquardt; Coryann Stefansson; Genevievette E WalkerSubject: Known AIG US Infrastructure participationDate: 09/16/2008 12:18 PMImportance: HighAttachments: Known AIG affiliates - Infrastructure Participation.xls

All,

Here is what we could find on AIG affiliates participation in DTCC, OCC, CME, et also far. This information has been confirmed by a check of the membership lists ofthese infrastructures, but we are not sure if other AIG affiliates going by a namethat is not know to us are also participants. If anyone has additional information toprovide please let us know and we'll update this chart.

Jeff StehmAssociate DirectorFederal Reserve Board202-452-2217 (office)

email: [email protected](b) (6)

BOG-- FOIA 10-251 --000976

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

BOG-- FOIA 10-251 --000977

From: Scott AlvarezTo: Neel KashkariSubject: Re: fund insertDate: 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: [email protected] To: Kashkari, Neel Sent: Tue Sep 16 10:11:13 2008Subject: Re: fund insert

Any progress? We'll break in about 30 minutes. Anything I should pass on to the Chair atthat point? I'll have a revised outline on legislation before then. We are already at work on a draft ofthe 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: [email protected] <[email protected]>To: Kashkari, NeelSent: Tue Sep 16 08:53:08 2008Subject: Re: fund insert

Neel

Thanks Scott--------------------------Sent from my BlackBerry Wireless Handheld

----- Original Message -----From: Neel.KashkariSent: 09/16/2008 12:40 AM ASTTo: Scott AlvarezCc: Terrence CheckiSubject: Re: fund insert

Sounds good

----- Original Message -----From: [email protected] <[email protected]>To: Kashkari, NeelCc: [email protected] <[email protected]>Sent: Tue Sep 16 00:39:19 2008Subject: Re: fund insert

Neel,

Scott

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --000979

Neel.Kashkari@do. treas.gov To 09/16/2008 12:34 [email protected], AM [email protected] cc

Subject Re: fund insert

----- Original Message -----From: [email protected] <[email protected]>To: Kashkari, Neel; [email protected] <[email protected]>Sent: Tue Sep 16 00:29:09 2008Subject: fund insert

Here's a draft insert for the fund. Need more detail?

Thanks!

Scott

(b) (5)

BOG-- FOIA 10-251 --000980

From: [email protected]: [email protected]: RE: fund insertDate: 09/16/2008 12:23 PM

From: [email protected] [mailto:[email protected]] Sent: Tuesday, September 16, 2008 12:20 PMTo: Kashkari, NeelSubject: Re: fund insert

Neel How are we doing? Any news on AIG? Scott--------------------------Sent from my BlackBerry Wireless Handheld

Duplicate

(b) (5)

BOG-- FOIA 10-251 --000981

From: Melissa A VanlandinghamTo: William CarlucciSubject: AIG clearing broker/dealer, settling bank, outstanding CPDate: 09/16/2008 12:25 PMAttachments: 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 thesystems they use just so it is clear what I am asking about. There is no new info onit since I sent it to you the other day.

Also, can you pull infomation on the outstanding CP in AIG's various programs?

Thanks.


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

BOG-- FOIA 10-251 --000982

BOG-- FOIA 10-251 --000983

From: Scott AlvarezTo: Neel KashkariSubject: Re: fund insertDate: 09/16/2008 12:26 PM

Great. 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

(b) (5)

Duplicate

BOG-- FOIA 10-251 --000984

From: Jeffrey LevineTo: NY Bank Sup - LFI CPC UpdatesCc: Theonilla Lee-Chan; Barbara Yelcich; Gregory Gaare; Laura Braverman; Jennifer Tranter; Erin Upton; Edgar

Moreano; Christopher Hunter; Antonino Piscitello; James DeFalco; Liska Holness; Benjamin EddySubject: JPMC: Liquidity Update from 10:30am conversation with TreasuryDate: 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

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From: Oesterle, Mark (Banking)To: [email protected]: Re:Date: 09/16/2008 12:31 PM

Yep and aig in particular. -------------------------- Sent from my BlackBerry Wireless Handheld

From: [email protected] To: Oesterle, Mark (Banking) Sent: Tue Sep 16 12:28:25 2008Subject: Re:

Ok. Status update re recent market developments?--------------------------Sent from my BlackBerry Wireless Handheld

From: "Oesterle, Mark (Banking)" [[email protected]] 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: [email protected] <[email protected]>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 youknow what the topic is?--------------------------Sent from my BlackBerry Wireless Handheld

BOG-- FOIA 10-251 --000988

From: [email protected]: [email protected]: Re: fund insertDate: 09/16/2008 12:41 PM

Yes. (b) (5)

Duplicate

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From: Diya K ChauhanTo: 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

Subject: Analyst Reports-Lehman, AIG, BOADate: 09/16/2008 12:49 PMAttachments: WF Lehman exposure.pdf

AIG analysis-15Sep.pdfAIG Comment by Morgan Stanely Research.pdfAIG Industry Comment 16Sep.pdfBOA Analysis-16Sep.pdfBOA Analysis.pdfLehman CDOs-Fitch.pdf

Diya K. ChauhanDivision of Banking Supervision and RegulationBoard of Governors of the Federal Reserve System(202) 452-3046

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Subject: Ratings Downgrades ReportsDate: 09/16/2008 12:51 PMAttachments: Lehman downgrade by S&P.pdf

Merrill Entities on Watch-Fitch.pdfWAMU Downgrade by S&P.pdfAIG downgrade by Moody's.pdfBOA downgrade by Moody's.pdfBOA Downgrade by S&P.pdfLehman downgrade by Fitch.pdfLehman downgrade by Moody's.pdf


BOG-- FOIA 10-251 --001044

of 2Fitch Press Release

9/16/2008http://www.fitchresearch.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=434960

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of 6Moodys - Corporate Highlights

9/16/2008http://www.moodys.com/cust/loadHighLight.asp?documentID=1506800000006814&origi...

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Back to To

©Copyright 2008 Moody's Investors Service Terms of Use Privacy Policy Proprietary Rights

16 SEP 2008, 12:20 Eastern Time

Page 6 of 6Moodys - Corporate Highlights


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From: William R NelsonTo: Krista BoxSubject: Re: Two reports on AIG from S&P "Ratings Direct"Date: 09/16/2008 12:52 PMAttachments: S&P AIG Ratings.pdf

S&P re- AIG Downgrade.pdf

thanks!

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile: ▼ Krista Box/BOARD/FRS

KristaBox/BOARD/FRS

09/16/2008 12:20 PM


cc

Subject Two reports on AIG from S&P "Ratings Direct"

Bill,

I finally managed to find someone who has access to Standard andPoor's "Ratings Direct" database. Here are two reports on AIG. One isdated September 15, and the other September 16.

Please let me know if these aren't what you were expecting and ifyou'd like me to continue searching.

- Krista Box, Research Library, x3332

(b) (6)

BOG-- FOIA 10-251 --001061

From: [email protected]: [email protected]; [email protected]: [email protected]; [email protected]; [email protected]: Wall St. jumps on report government mulls AIG cashDate: 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 televisionreported that government money had now been put on the table indiscussions over a financial lifeline for embattled insurer AmericanInternational 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 thecompany.

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 apotential rescue deal.

Worries about AIG were accentuated by concerns that the U.S. governmentwould refuse to provide a financial lifeline as it did in the case of LehmanBrothers Holdings. The 158-year-old Wall Street icon subsequently filed forbankruptcy protection on Monday.


BOG-- FOIA 10-251 --001062

From: Ann MinerTo: Jennifer A LucierSubject: Fw: Counterparty Update 9/16/08 - MiddayDate: 09/16/2008 01:01 PM

----- Forwarded by Ann Miner/NY/FRS on 09/16/2008 01:00 PM -----

WilliamHallacy/NY/FRS

09/16/2008 12:42 PM

To NY BankSup New York CPC

cc

Subject Fw: Counterparty Update 9/16/08 - Midday

Restricted FR

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

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BOG-- FOIA 10-251 --001063


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BOG-- FOIA 10-251 --001064

From: William R NelsonTo: Krista BoxSubject: Re: Two reports on AIG from S&P "Ratings Direct"Date: 09/16/2008 01:02 PM

thanks Krista. Both of those are discussions of downgrades that ocurred because ofthe AIG downgrade. What would be most helpful would be a discussion of why theparent company, AIG, was downgraded.

It's not crucial if it is turning out to be a lot of work. The information is pretty muchcovered by the wire services.

--Bill

Email: [email protected]: 202-452-3579Blackberry: 202-725-3612Mobile:▼ Krista Box/BOARD/FRS

KristaBox/BOARD/FRS

09/16/2008 12:20 PM


cc

Subject Two reports on AIG from S&P "Ratings Direct"

Duplicate

(b) (6)

BOG-- FOIA 10-251 --001065



Subject: AIG downgrade by S&PDate: 09/16/2008 01:02 PMAttachments: AIG downgrade by S&P.pdf

one more- sorry


BOG-- FOIA 10-251 --001066

From: Edgar MoreanoTo: Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin


Cc: James DeFalco; Erin Upton; Gregory Gaare; Christopher Hunter; Jennifer Tranter; Antonino Piscitello; JeffreyLevine; Laura Braverman; Theonilla Lee-Chan; Benjamin Eddy; Barbara Yelcich; Steven J Manzari; GregoryGaare

Subject: AIG drawing on its credit lineDate: 09/16/2008 01:05 PM

JPMC credit risk management confirmed that

Edgar MoreanoFederal Reserve Bank of New York(212) 789-4359

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

BOG-- FOIA 10-251 --001067

From: Carol RollerTo: NY Bank Sup - LFI CPC Updates@FRSCc: Stephanie Chaly; Yogesh Shah; Timothy Carlin; Linda Rodriguez; Nirali Deringer; Bridget Habib; Richard Kunen;

Pat SorianoSubject: Barclays credit update - morning 9/16Date: 09/16/2008 01:12 PMAttachments: Credit Report 15Sep.snp

F.R. Restricted

Collateral Management Credit Report - COB 9/15/08

The next Credit Risk Management meeting with Barclays is scheduled for 4:00 today.

Carol M. RollerFed: (212) 720-1902Barclays: (212) 412-4063

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

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From: Jeff StehmTo: Melissa A Vanlandingham; Dibora Amanuel; Jeffrey Marquardt; Susan V FoleySubject: Fw: AIG settling banksDate: 09/16/2008 01:13 PMAttachments: AIG settling banks info.pdf


email: [email protected] Forwarded by Jeff Stehm/BOARD/FRS on 09/16/2008 01:13 PM -----

LisaJoniaux/NY/FRS@FRS

09/16/2008 01:10 PM

To Jeff Stehm/BOARD/FRS@BOARD

cc

Subject Fw: AIG settling banks

Lisa JoniauxCPC for The Depository Trust CompanyFederal Reserve Bank of New York(212) 720-2530----- Forwarded by Lisa Joniaux/NY/FRS on 09/16/2008 01:09 PM -----

AlbertAlvarado/NY/FRS

09/15/2008 08:01 PM

To Benecia Cousin/NY/FRS@FRS, Ada Li/NY/FRS@FRS,Roger Graham/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS

cc Lisa Joniaux/NY/FRS@FRS, WilliamCarlucci/NY/FRS@FRS, Anna Ng/NY/FRS@FRS

Subject AIG settling banks

fyi -

(b) (6)

BOG-- FOIA 10-251 --001069

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

BOG-- FOIA 10-251 --001070

From: Joshua L MazenTo: Jeff StehmSubject: Re: Fw: AIG FSB informationDate: 09/16/2008 01:20 PMAttachments: AIG.xls


Jeff,

This FSB entity is eligible for Fedwire funds and securities. So far today, the ABA isactive in funds but not securities.

--Josh

Josh MazenBoard of Governors of the Federal Reserve SystemDivision of Reserve Bank Operations and Payment Systems202-452-2373

▼ Jeff Stehm/BOARD/FRS

JeffStehm/BOARD/FRS

09/16/2008 01:10 PM

To Joshua L Mazen/BOARD/FRS@BOARD

cc

Subject Fw: AIG FSB information

Josh,

Please confirm for me the Fedwire funds and securities access for thisFSB entity.....ABA below.

Jeff StehmAssociate DirectorFederal Reserve Board202-452-2217 (office)202-412-9846 (cell)email: [email protected]

----- Forwarded by Jeff Stehm/BOARD/FRS on 09/16/2008 01:10 PM -----


09/15/2008 01:32 PM

To Jeffrey Marquardt/BOARD/FRS@BOARD, RBOPSPAYMENT SYSTEM RISK, JeffStehm/BOARD/FRS@BOARD

cc

Subject AIG FSB information

BOG-- FOIA 10-251 --001071

Duplicate

BOG-- FOIA 10-251 --001072

From: Patrick M ParkinsonTo: [email protected]; [email protected]; James A ClouseSubject: Fw: AIG drawing on its credit lineDate: 09/16/2008 01:22 PM

----- Forwarded by Patrick M Parkinson/BOARD/FRS on 09/16/2008 01:21 PM -----

EdgarMoreano/NY/FRS@FRS

09/16/2008 01:05 PM

To Alexa Philo/NY/FRS@FRS, Amy White/NY/FRS@FRS,Andrew Small/NY/FRS@FRS, AnthonyCirillo/NY/FRS@FRS, Arthur Angulo/NY/FRS@FRS,Barbara Yelcich/NY/FRS@FRS, BardStermasi/NY/FRS@FRS, Bin Lang/NY/FRS@FRS,Brandon Hall/NY/FRS@FRS, BrianBegalle/NY/FRS@FRS, Brian Hefferle/NY/FRS@FRS,Brian Peters/NY/FRS@FRS, BridgetHabib/NY/FRS@FRS, Caroline Nuffort/NY/FRS@FRS,Catherine Voigts/NY/FRS@FRS, ChrisHaley/BOS/FRS@FRS, ChristinaZausner/NY/FRS@FRS, Christine ESchwaninger/BOARD/FRS@BOARD, ChristopherCalabia/NY/FRS@FRS, Claudia Franco/NY/FRS@FRS,Clinton Lively/NY/FRS@FRS, CorbinLong/NY/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, CraigLeiby/NY/FRS@FRS, Daniel Muccia/NY/FRS@FRS,Deborah Lohnau/NY/FRS@FRS, DexterWilliams/NY/FRS@FRS, DianneDobbeck/NY/FRS@FRS, H Clay Saylor/NY/FRS@FRS,Homer Hill/NY/FRS@FRS, Isabella LoPiccolo/NY/FRS@FRS, James Hodgetts/NY/FRS@FRS,Jan Voigts/NY/FRS@FRS, JaneWakefield/NY/FRS@FRS, JeanmarieDavis/NY/FRS@FRS, Jeffrey Levine/NY/FRS@FRS,Jennifer Burns/RICH/FRS@FRS, JimMahoney/NY/FRS@FRS, John Beebe/RICH/FRS@FRS,John Harvey/NY/FRS@FRS, JohnHeinze/NY/FRS@FRS, John Ricketti/NY/FRS@FRS, JonD Greenlee/BOARD/FRS@BOARD, JonathanPolk/NY/FRS@FRS, Jordan Pollinger/NY/FRS@FRS,Joseph Galati/NY/FRS@FRS, JoshuaSherwin/NY/FRS@FRS, Judith JGruttman/NY/FRS@FRS, Kara Sulmasy/NY/FRS@FRS,Karen Kahrs/NY/FRS@FRS, Katheryn Van derCelen/NY/FRS@FRS, Kenton Beerman/NY/FRS@FRS,Kevin Clarke/NY/FRS@FRS, KevinCoffey/NY/FRS@FRS, Kevin Lee/NY/FRS@FRS, KirstenHarlow/NY/FRS@FRS, Kyle Grieser/NY/FRS@FRS,Lance Auer/NY/FRS@FRS, LawrenceROSTOKER/NY/FRS@FRS, Laxmi Rao/NY/FRS@FRS,Lucinda M Brickler/NY/FRS@FRS, LuisUranga/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS,Michael Johnson/SF/FRS@FRS, Nancy RBerlad/BOARD/FRS@BOARD, Patrick MParkinson/BOARD/FRS@BOARD, PaulWhynott/NY/FRS@FRS, RandolphBrown/NY/FRS@FRS, Richard Kunen/NY/FRS@FRS,Richard McGee/NY/FRS@FRS, RobertGutierrez/NY/FRS@FRS, Roger Graham/NY/FRS@FRS,Ronald Stroz/NY/FRS@FRS, SandyKrieger/NY/FRS@FRS, Sarah Dahlgren/NY/FRS@FRS,Stephanie Chaly/NY/FRS@FRS, Steven JManzari/NY/FRS@FRS, Steven Mirsky/NY/FRS@FRS,Susan G Ballinger/NY/FRS@FRS, SusanGoldberg/NY/FRS@FRS, TheodoreLubke/NY/FRS@FRS, Theonilla Lee-

BOG-- FOIA 10-251 --001073

Chan/NY/FRS@FRS, Thomas J O'Keeffe/NY/FRS@FRS,Tim P Clark/BOARD/FRS@BOARD, ToddWaszkelewicz/NY/FRS@FRS, Wendy Ng/NY/FRS@FRS,William BRODOWS/NY/FRS@FRS, WilliamHallacy/NY/FRS@FRS, Wing Oon/NY/FRS@FRS

cc James DeFalco/NY/FRS@FRS, ErinUpton/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS,Christopher Hunter/NY/FRS@FRS, JenniferTranter/NY/FRS@FRS, AntoninoPiscitello/NY/FRS@FRS, Jeffrey Levine/NY/FRS@FRS,Laura Braverman/NY/FRS@FRS, Theonilla Lee-Chan/NY/FRS@FRS, Benjamin Eddy/NY/FRS@FRS,Barbara Yelcich/NY/FRS@FRS, Steven JManzari/NY/FRS@FRS, Gregory Gaare/NY/FRS@FRS

Subject AIG drawing on its credit line

Duplicate

BOG-- FOIA 10-251 --001074

From: Lisa JoniauxTo: Jeff StehmSubject: Re: Fw: DTC intraday balance reportDate: 09/16/2008 01:22 PMAttachments: DEPOSITORY TC 20080915.pdf

OK -

Lisa JoniauxCPC for The Depository Trust CompanyFederal Reserve Bank of New York(212) 720-2530▼ Jeff Stehm/BOARD/FRS@BOARD


09/16/2008 01:16 PM

To Lisa Joniaux/NY/FRS@FRS

cc

Subject Re: Fw: DTC intraday balance report


email: [email protected]▼ Lisa Joniaux/NY/FRS@FRS

LisaJoniaux/NY/FRS@FRS To Jeff Stehm/BOARD/FRS@BOARD

cc Jeffrey Marquardt/BOARD/FRS@BOARD, LawrenceSweet/NY/FRS@FRS, Marsha Takagi/NY/FRS@FRS,

(b) (6)

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

Not Responsive

Not Responsive

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

BOG-- FOIA 10-251 --001075

09/16/2008 01:07 PM Susan V Foley/BOARD/FRS@BOARD, WilliamCarlucci/NY/FRS@FRS

Subject Re: Fw: DTC intraday balance report

Lisa JoniauxCPC for The Depository Trust CompanyFederal Reserve Bank of New York(212) 720-2530▼ Jeff Stehm/BOARD/FRS@BOARD


09/16/2008 12:18 PM

To Lisa Joniaux/NY/FRS@FRS, WilliamCarlucci/NY/FRS@FRS

cc Jeffrey Marquardt/BOARD/FRS@BOARD,Lawrence Sweet/NY/FRS@FRS, MarshaTakagi/NY/FRS@FRS, Susan VFoley/BOARD/FRS@BOARD

Subject Fw: DTC intraday balance report


email: [email protected] Forwarded by Jeff Stehm/BOARD/FRS on 09/16/2008 12:13 PM -----


09/16/2008 12:04 PM

To Jeff Stehm/BOARD/FRS@BOARD

cc

Subject DTC intraday balance report

Jeff,

Please see attached.

(b) (6)

Not Responsive

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

BOG-- FOIA 10-251 --001076

Danielle

Danielle LittleFederal Reserve [email protected]

BOG-- FOIA 10-251 --001077

Not Responsive

BOG-- FOIA 10-251 --001078

From: Coryann StefanssonTo: Diann Townsend; Kwayne JenningsCc: Ron FeldmanSubject: Re: Additional Exposure InformationDate: 09/16/2008 01:22 PM

If you believe u r not getting the information you need this is a fine time to contactthe bank directlyCoryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # ▼ Diann Townsend

----- Original Message ----- From: Diann Townsend Sent: 09/16/2008 12:20 PM CDT To: Coryann Stefansson; Kwayne Jennings Cc: Ron Feldman Subject:

Diann TownsendSupervision, Regulation, and CreditFederal Reserve Bank of Minneapolis612-204-6130

(b) (6)

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

Not Responsive

BOG-- FOIA 10-251 --001079

From: Ralph SantasieroTo: NY Bank Sup - LFI CPC Updates@FRSSubject: BNYM 9/16 Mid-Day UpdateDate: 09/16/2008 01:24 PM

Here are consolidated notes from discussions held with BNYM mgmt through mid-day:

Credit Update(b)(4) & (b)(8)

Not Responsive

BOG-- FOIA 10-251 --001080

From: Philip AquilinoTo: NY Bank Sup - LFI CPC UpdatesCc: 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 GreenleeSubject: WFC 9/16 Update (as of 10:15am PST)Date: 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: Jon D GreenleeTo: Sabeth I Siddique; Brian P ValentiSubject: Fw: WFC 9/16 Update (as of 10:15am PST)Date: 09/16/2008 01:29 PM

see below - looks like the MAC clauses are going to be invoked.


PhilipAquilino/SF/FRS@FRS

09/16/2008 01:28 PM

To NY Bank Sup - LFI CPC Updates

cc Michael Johnson/SF/FRS@FRS, CoryannStefansson/BOARD/FRS@BOARD, Nancy JOakes/BOARD/FRS@BOARD, Jennifer Su/SF/FRS@FRS,Jeffrey Plaskett/SF/FRS@FRS, FredMinardi/SF/FRS@FRS, Michele Magidoff/SF/FRS@FRS,Robert Speaks/SF/FRS@FRS, DonnaO'Kane/SF/FRS@FRS, Teresa Curran/SF/FRS@FRS,Steve Hoffman/SF/FRS@FRS, David MWright/SF/FRS@FRS, Jon DGreenlee/BOARD/FRS@BOARD

Subject WFC 9/16 Update (as of 10:15am PST)

Restricted F.R.

Credit Risk (Philip Aquilino and Fred Minardi)Duplicate

BOG-- FOIA 10-251 --001083

From: Alain P ChaboudTo: Nathan Sheets; Steven Kamin; Michael Leahy; David H BowmanSubject: AIG's ability to trade foreign exchange on EBS (confidential)Date: 09/16/2008 01:34 PMImportance: High

I spoke to Niall Coffey at FRBNY about this.

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

BOG-- FOIA 10-251 --001084

From: JNellie LiangTo: Rita C Proctor; Donald L Kohn; Kevin Warsh; Randall S Kroszner; Elizabeth A DukeCc: Brian F Madigan; Patrick M Parkinson; Daniel M Covitz; Gustavo A SuarezSubject: Revised version of memo on commercial paper market conditionsDate: 09/16/2008 01:36 PMAttachments: 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: Scott AlvarezTo: [email protected]: Re: fund insertDate: 09/16/2008 01:42 PM

Neel,

Thanks! Scott


[email protected]

09/16/2008 10:17 AM


cc

Subject Re: fund insert

(b) (5)

Duplicate

BOG-- FOIA 10-251 --001094

From: Elizabeth A DukeTo: Deborah P BaileySubject: Re: Fw: AIG -WFC 9/16 Update (as of 10:15am PST)Date: 09/16/2008 01:53 PM

▼ Deborah P Bailey/BOARD/FRS


09/16/2008 01:40 PM

To Donald L Kohn/BOARD/FRS@BOARD, Randall SKroszner/BOARD/FRS@BOARD, Elizabeth ADuke/BOARD/FRS@BOARD

cc

Subject Fw: AIG -WFC 9/16 Update (as of 10:15am PST)

Info from our Wells Fargo team. ----- Forwarded by Deborah P Bailey/BOARD/FRS on 09/16/2008 01:38 PM -----


09/16/2008 01:30 PM


cc

Subject Fw: WFC 9/16 Update (as of 10:15am PST)

Duplicate

(b) (5)

BOG-- FOIA 10-251 --001095

From: Deborah P BaileyTo: Elizabeth A DukeSubject: Re: Fw: AIG -WFC 9/16 Update (as of 10:15am PST)Date: 09/16/2008 01:58 PM

--------------------------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)

▼ Deborah P Bailey/BOARD/FRS


09/16/2008 01:40 PM

To Donald L Kohn/BOARD/FRS@BOARD, Randall SKroszner/BOARD/FRS@BOARD, Elizabeth ADuke/BOARD/FRS@BOARD

cc

Subject Fw: AIG -WFC 9/16 Update (as of 10:15am PST)

Duplicate

(b) (5)

(b) (5)

BOG-- FOIA 10-251 --001096

From: Jennifer A LucierTo: Marsha TakagiCc: Elizabeth TafoneSubject: Re: Fw: Meeting Minutes Payments and Settlement and Tri-Party Calls September 16, 2008Date: 09/16/2008 02:03 PM

Marsha,

Liz pointed me in the right direction - here are the draft minutes - bolded text seemsconsistent with what you mentioned in your earlier message regarding not sayinganything too difinitive:

Jennifer A. LucierProject LeaderClearance and Settlement SystemsFederal Reserve Board(202) 872-7581 (office)

[email protected]▼ Marsha Takagi/NY/FRS@FRS

MarshaTakagi/NY/FRS@FRS

09/16/2008 01:54 PM

To Jennifer A Lucier/BOARD/FRS@BOARD

cc Elizabeth Tafone/NY/FRS@FRS

Subject Re: Fw: Meeting Minutes Payments and Settlement

and Tri-Party Calls September 16, 2008

(b) (6)

Not Responsive

Not Responsive

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

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: Paul S WebsterTo: Alexa Philo; Amy White; Andrew Small; Anthony Cirillo; Arthur Angulo; Barbara Yelcich; Bard Stermasi; Bin


Cc: Eric Rosengren; Jim Nolan; Jackie Palladino; Maureen B SavageSubject: Fw: RBS Funding Update - 9/16/08Date: 09/16/2008 02:11 PM

----- Forwarded by Paul S Webster/BOS/FRS on 09/16/2008 02:09 PM -----

JenniferHynes/BOS/FRS

09/16/2008 01:12 PM

To Tony Bardascino/RICH/FRS@FRS, TheresaBarry/BOS/FRS@FRS, Paul S Webster/BOS/FRS@FRS,Scott Strah/BOS/FRS@FRS, TimothyDaniels/BOS/FRS@FRS, Ken Fortier/BOS/FRS@FRS,Erin Long/BOS/FRS@FRS, Chris Haley/BOS/FRS@FRS

cc

Subject RBS Funding Update - 9/16/08

RBS Group:

Not Responsive

BOG-- FOIA 10-251 --001101

Jennifer W. HynesSupervision, Regulation and Credit DepartmentFederal Reserve Bank of Boston617-973-3827 / 617-662-4747 (tel)617-973-3265 (fax)[email protected]

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

Not Responsive

BOG-- FOIA 10-251 --001102

From: Scully, Robert (FM)To: [email protected]: Fw: Market impactDate: 09/16/2008 02:32 PMAttachments: 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 2008Subject: RE: Market impact

See attached.

Kevin Ryan, Managing DirectorMorgan Stanley | Global Capital Markets1585 Broadway | Floor 04New York, NY 10036Phone: +1 212 761-2825Fax: +1 212 [email protected]

-----Original Message-----From: Scully, Robert (FM)Sent: Tuesday, September 16, 2008 2:19 PMTo: 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 theGSE 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: Coryann StefanssonTo: David Gibson; BSR LIGSubject: Re: Breakout of Lehman and AIG exposuresDate: 09/16/2008 02:45 PM

I think there may already exist the list for the lfis...Coryann StefanssonAssociate DirectorBank Supervision and Regulation Work # 202 452 5287Cell # ▼ 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.

The deadline is 4:30, this will hopefully give me enough time tosummarize and turn it in by the time it is due to management (due tomanagement: COB TODAY).

Thank you

David W. Gibson Jr.Large Institutions GroupBanking Supervision & RegulationPhone: 202-530-6209

(b) (6)

(b) (5) and (b) (8)

BOG-- FOIA 10-251 --001110

From: Michelle A SmithTo:Subject: Fw: Rita, please bring five copies in for Michelle Smith please.Date: 09/16/2008 02:49 PMAttachments: 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

(b) (6)

BOG-- FOIA 10-251 --001111

(b) (5)

BOG-- FOIA 10-251 --001112

From: Theodore LubkeTo: Lawton, John C.Cc: Jennifer A Lucier; Lawrence SweetSubject: Re: aigDate: 09/16/2008 03:07 PM

John - Thank you for this. Are you still around here or are you in DC? I'd like todiscuss.

Theo LubkeSenior Vice PresidentBank Supervision GroupFederal Reserve Bank of New [email protected]: 212-720-6334fax: 212-720-7818http://www.newyorkfed.org▼ "Lawton, John C." <[email protected]>

"Lawton, John C."<[email protected]>

09/16/2008 02:54 PM

To <[email protected]>,<[email protected]>

cc "Lukken, Walter" <[email protected]>, "Loesch,Michael" <[email protected]>, "Radhakrishnan,Ananda" <[email protected]>, "Smith,Thomas J." <[email protected]>, "Wasserman, RobertB." <[email protected]>, "Markman, Natalie A."<[email protected]>

Subject aig

Michael Loesch asked me to pass on the following info.

(b) (5)

BOG-- FOIA 10-251 --001113

From: Michelle A SmithTo: Calvin MitchellSubject: Re: Where do we stand?Date: 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: Brian F MadiganTo: Michelle A SmithSubject: AIG noteDate: 09/16/2008 03:28 PMAttachments: 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: Rich AshtonTo: Mark VanDerWeide; Sophia H AllisonSubject: Fw: Revised AIG Term SheetDate: 09/16/2008 06:43 PMAttachments: 2008 09 16 Term Sheet.doc

DV Comparison 2008 09 16 Term Sheet.080916 1316-2008 09 16 Term Sheet.rtfAIG 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. ----- Forwarded by Rich Ashton/BOARD/FRS on 09/16/2008 06:40 PM -----

ScottAlvarez/BOARD/FRS

09/16/2008 03:42 PM

To Rich Ashton/BOARD/FRS@BOARD

cc

Subject Fw: Revised AIG Term Sheet

----- Forwarded by Scott Alvarez/BOARD/FRS on 09/16/2008 03:42 PM -----

[email protected]

09/16/2008 02:28 PM


cc

Subject Fw: Revised AIG Term Sheet

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: James A ClouseTo: William R NelsonSubject: Fw: Raw Materials for our early morning meeting with Tim.Date: 09/17/2008 09:25 AMAttachments: Proposal to Reinsure Stable Value Fund Business for AIG.doc

Systemic Issues in AIG failure.docSystemic Impact of AIG Bankruptcy.DOCPros and Cons of Lending to AIG.docRetail nature.docLEGALDOCS-#283317-v3-One Pager re AIG Bankruptcy Considerations.DOCSummary of AIG's market risk positioning.docAIG Summary 16 September 2008.doc

[email protected]: 703-304-6276blackberry: 202-390-3521----- Forwarded by James A Clouse/BOARD/FRS on 09/17/2008 09:26 AM -----


09/17/2008 09:00 AM

To James A Clouse/BOARD/FRS@BOARD

cc

Subject Fw: Raw Materials for our early morning meeting withTim.

Jim,

These are the documents. If there are questions, or I can be of assistance, let meknow.

Regards,

Alex.

----- Forwarded by Alejandro LaTorre/NY/FRS on 09/17/2008 08:54 AM -----


09/16/2008 01:08 PM

To Michael Silva/NY/FRS, Meg McConnell/NY/FRS

cc Adam Ashcraft/NY/FRS@FRS, AlejandroLaTorre/NY/FRS@FRS, Alexa Philo/NY/FRS@FRS,Alexander J Psomas/NY/FRS@FRS, BardStermasi/NY/FRS@FRS, Catherine Voigts/NY/FRS@FRS,Christopher Calabia/NY/FRS@FRS, DanielleVicente/NY/FRS@FRS, Denise Goodstein/NY/FRS@FRS,Dianne Dobbeck/NY/FRS@FRS, EliseLiebers/NY/FRS@FRS, Erika Gottfried/NY/FRS@FRS,Jim Mahoney/NY/FRS@FRS, KevinCoffey/NY/FRS@FRS, Mark Scapp/NY/FRS@FRS, MinKim/NY/FRS@FRS, Paul Whynott/NY/FRS@FRS, TobiasAdrian/NY/FRS@FRS, Hayley Boesky/NY/FRS@FRS,Richard Charlton/NY/FRS@FRS, AzishFilabi/NY/FRS@FRS, James Hennessy/NY/FRS@FRS

Subject Raw Materials for our early morning meeting with Tim.

(b) (5)

BOG-- FOIA 10-251 --001119

To be ensure we all have the same docs; am sending around what I've received asinput into Tim's summary document from yesterday.

If I've left something out please distribute to the group. I'll defer to banksup as towhether they want to circulate exposure figures as this is confidential.

- AIG Summary 16 September 2008.doc

BOG-- FOIA 10-251 --001120

-1-

(b) (5)

BOG-- FOIA 10-251 --001121

-2-

(b) (5)

BOG-- FOIA 10-251 --001122

-3-

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

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

1

(b) (5)

BOG-- FOIA 10-251 --001129

2

(b) (5)

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

Defendant Federal Reserve Document Production on AIG from Sept 2008 Heavy Redactions (Lawsuit #3)

Documents

Transcript of Defendant Federal Reserve Document Production on AIG from Sept 2008 Heavy Redactions (Lawsuit #3)