‘Crazily high’ AIG rate may have been forced on N.Y. Fed
October 9, 2014 by Andrew Zajac and Christie Smythe
(Bloomberg) — A “crazily high” interest rate levied on American International Group Inc.’s $85 billion bailout loan may have been forced on the Federal Reserve Bank of New York by other regulators, according to evidence presented at a trial over the government’s taking stock of the insurer.
Timothy Geithner, the bank’s former head who is testifying in a trial accusing the government of cheating AIG shareholders, said yesterday that he was responsible for setting the rate and stuck by that statement during his second day on the witness stand.
Maurice “Hank” Greenberg’s Starr International Co., which was the insurer’s largest shareholder before the 2008 bailout, accuses the government of illegally taking equity in consideration for the loan and seeks more than $25 billion in damages. Click here to read…
