Donald Kohn

  • ?-2008-? – FRB-NY – Federal Reserve Bank of New York – General Counsel and Executive Vice President of the Legal Group 
  • update: brief conversation with Jacob.
    • Told him we were “very reluctant” to open up another 13-3 facility for an entity not even an investment bank.
    • And that the market thought it was not only a liquidity problem but also a capital problem. He gave me the bridge to asset sales speech and then said he would get willumsted and call me back. I’m waiting.
  • [Bonk: Jacob =  Jacob Frenkel, AIG Vice Chairman]
  • [Bonk: willumsted = Bob Willumstad, AIG CEO]

2008 0913 – email – Donald Kohn (FRB-NY) to Scott Alvarez (FRB) – JX-046 – 1p

⇒ Case 1:11-cv-00779 – V2 2014 0930 – Trial Volume 2 – Alvarez – 231p

  • 2009 0305 – GOV (Senate) – American International Group: Examining What Went Wrong, Government Intervention, And Implications for Future Regulation, (CSPAN) Government Intervention and Regulation of AIG, Chris Dodd (D-CT)  —  [BonkNote]
    • Testimony
      • Eric Dinallo (NAIC / NYSID) – 8p
    • 14:40 – Senator Shelby
      • Significant losses in AIG’s State-regulated life insurance companies also contributed to the company’s collapse.  (p4)
      • More than $17 billion in Federal assistance has been used to recapitalize the State-regulated insurance companies to ensure that they are able to pay their policy holders’ claims.  (p5)
    • 33:00 – Eric Dinallo (NY / NAIC) – Securities Lending didn’t have anything/much to do with AIG Collapse, run on aig life, [Bonk: Reputational Risk] 
    • Securities Lending, RMBS, Liquidity, [Bonk: C-3, 1980 SOA Paper, Run on AIG]
    • Scott Polakoff – OTC
    • (p25) – Donald KOHN (Vice Chairman, Board of Governors of the Federal Reserve System):  Our authority under the Federal Reserve Act is to make loans.
      • We thought it was a short-term liquidity situation- in mid-September, this is what we thought-and that if we could bridge this situation with liquidity, then the company could make the adjustments to keep itself a going concern.
      • It turned out that the problems were deeper…
  • 2021 06 – Brookings – Task Force on Financial Stability, by Glenn Hubbard, Donald Kohn, Ralph Koijen, Blythe Masters – 135p
    • (p53) – The life insurance sector, while safe and quite boring in the past, has changed meaningfully during the past two decades from a financial stability perspective.
      • The Global Financial Crisis showed that the life insurance industry has  become fragile.
        • This fragility was not limited to AIG. Some other companies received Troubled Asset Relief Program (TARP) support (for example, Hartford Financial Services Group received $3.4 billion in TARP equity).
    • (p53) – Although the industry and its regulators responded to some extent to the problems that became evident in 2008, the fragility of the life insurance sector appears to persist.
      • The first important factor is…
    • Captive reinsurance, or “shadow insurance,” has also increased the opacity of the industry.
    • Shadow insurance developed in response to regulatory changes in 2000 and 2003 for term and universal life insurance, known as “Regulations XXX and AXXX.”**
    • These regulations tightened the regulatory capital requirements for these traditional products-for operating companies, which sell directly to consumers, but not for reinsurance companies.

  • (p3) – Co-chair: Donald Kohn
    •  Robert V. Roosa Chair in International Economics and a senior fellow in the Brookings Hutchins Center.
    • Kohn was at the Federal Reserve Board from 1975 to 2010, the last several years as vice chair.
    • He is a member of the FDIC’s Systemic Resolution Advisory Committee and a former member of the Financial Policy Committee of the Bank of England.