AIG - OTS

  • Michael Finn
  • Joseph Gonzales, the examiner in charge from April 2004 to November 2006, told FCIC staff, “I overheard one employee saying that Joe Cassano felt that [the OTS was] overreaching our scope by going into FP.”66  (p351)
    • 2011 01 - FCIC - Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States - 663p
  • Clarence Lee - Managing Director (Former)Office of Thrift Supervision - Complex and International Organization
  • Scott Polakoff
  • John Reich, Former Director of Office of Thrift Supervision
    • Finding Aid for the Records of the Financial Crisis Inquiry Commission - (RG 148) - FCIC - 1439p
      • (p1379) - 2010-05-04 John Reich In Person Interview
      • (p1392) - 2010-05-04 FCIC staff
      • (p562) - Reich Subpoena audiotape of interview with John Reich, Office of Thrift Supervision
  • 2004 - OTS - OTS Memo re AIG Meeting with the Commission Bancaire - 2p
  • 2007 - OTS - Targeted Review: American International Group, Inc. - Subject: AIG Financial Products, Corp. - 6p
    • Examination Start Date: April 23, 2007
    • Examination Completion Date: July 13, 2007
  • 2007 0611 - OTS - Office of Thrift Supervision Holding Company Report Of Examination of AIG - 52p
  • 2007 - OTS - Supervisory Plan for AIG - 8p
  • 2008 0307 - OTS to AIG - OTS (CL Lee) - A material weakness exists within corporate management's oversight of AIGFP's super senior
    Credit Default Swap (CDS) valuation process and financial reporting. - 3p
  • 2008 0310 - OTS to AIG - OTS (CK Lee) -  Letter to AIG Board Of Directors re Supervisory Concerns - FCIC -  3p

Finally, as to regulation, the Office of Thrift Supervision signed an agreement with the European Union to become a consolidated supervisor.

  • Mr. Reich, who was the head of OTS, told us that he wasn’t aware that they had the authority over the holding company.
  • He said they had no understanding of these credit default swap provisions, and in fact, he said, having the OTS regulate AIG was like having a gnat on an elephant. 

--  Mr. ANGELIDES

2011 0216 - GOV - THE FINAL REPORT OF THE FINANCIAL CRISIS INQUIRY COMMISSION  - 147p

  • 404 It is similarly worth noting that OTS, although it was AIG‘s primary regulatory, approached AIG from a bottom-up perspective, focused primarily on ensuring that no harm would be done to AIG‘s relatively small thrift institution, as opposed to taking a top-down approach that reviewed the overall safety and soundness of the holding company.
  • Given that AIG‘s thrift represented well under 1 percent of the holding company‘s assets, this approach seems misguided at best and raises questions about whether this is the most effective way to regulate complex companies and monitor their systemic risks. 2010 June Oversight Report, supra note 395, at 23. (p133)

2011 0316 - COP - Final Report - 233p

In my statement today, I would like to highlight just a few points.

The rapid decline of AIG stemmed from liquidity problems and two important business lines:

  • Number one, credit default swaps. A credit default swap is a derivative instrument that provides insurance-like protection to investors against credit losses from the underlying obligations which were typically mortgage loans.
  • Number two, securities lending, a business strategy implemented by a handful of AIG’s State insurance subsidiaries. (p17)

-- STATEMENT OF SCOTT M. POLAKOFF, ACTING DIRECTOR,
OFFICE OF THRIFT SUPERVISION (OTS)

2009 0318 - Federal Aid to AIG Insurance, Regulators Panel - [PDF-380p, Video-CSPAN]