Maybe the Federal Reserve Knows Something....maybe not

  • 1980s
  • 1990s
  • 2010s
    • 2010 0127 - GOV (House) - The Federal Bailout AIG  - [PDF-652p] Panel 1 - Geithner - [Video-YouTube] - They had no idea
    • 2010 0430 - FCIC memo of staff interview with Sarah Dahlgren, New York Fed - 5p

1980s - Paul Volcker - (Federal Reserve Chairman, 1979-1987)

The purpose of the meeting was to discuss concerns about the liquidity conditions and the possibilities of future adverse developments.

  • The company people wanted to be sure that Mr. Volcker  <Chairman of the Federal Reserve> was fully aware of the potentials of the situation and to arrange a liaison between his staff and the staff of the Council. and this aim was accomplished.
  • In the meantime, we have begun to explore the means by which the resources of the business might be applied to alleviate any temporary extreme liquidity problems that might arise for a particular member company.

1980-2, NAIC Proceedings

1990s - Alan Greenspan - (Federal Reserve Chairman, 1987–2006)

A number of other things happened in the summer of 1991 that didn't receive a great deal of publicity.

  • Alan Greenspan called a meeting of the CEOs of large insurers in Washington to privately discuss the situation.
  • Senator Howard Metzenbaum (D-OH) had a meeting with the senior life insurance executives in Washington in which he told them that while he didn't have the votes that day, if one more larger insurer was taken over, he would have the votes for federal control of the life insurance industry, and he meant it.
  • Of course, what also happened in the summer of 1991  very much increased concern by the state regulators.
  • None of the regulators wanted to be in the next state that would be surprised by a life insurance situation.

1995 - SOA - Liquidity:  The Hidden Risk Factor, Society of Actuaries - 20p

2010s

  • She explained that most of the money drawn from the facility went to securities lending counterparties. 
  • Dixie asked how much money was drawn from the facility between September 16 and November 10 when the Maiden Lane transactions were announced.
    • Ms. Dahlgren said “north of $60 billion, but I’d have to verify that. (p2)

2010 0430 - FCIC - FCIC memo of staff interview with Sarah Dahlgren, New York Fed - 5p