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By Greg Robb
Last update: 4:39 p.m. EDT March 23, 2009Comments: 64
WASHINGTON (MarketWatch) -- The Treasury and the Federal Reserve released a joint statement Monday that spells out the different responsibilities of the two agencies in dealing with the financial crisis. In the most noteworthy part of the agreement, Treasury said it would take over the Fed's holding of assets of Bear Stearns and American International Group. Treasury did not say how it would pay for these programs and said it would only make the move "in the longer term and as its authorities permit." The Fed's investments in the three funds, known as Maiden Lane, totaled $72.21 billion in the latest week, according to Fed statistics.
http://www.federalreserve.gov/newsev.../20090323b.htm
For release at 4:30 p.m. EDT March 23, 2009
The Role of the Federal Reserve in Preserving Financial and Monetary Stability
Joint Statement by the Department of the Treasury and the Federal Reserve
[..]
In the longer term and as its authorities permit, the Treasury will seek to remove from the Federal Reserve's balance sheet, or to liquidate, the so-called Maiden Lane facilities made by the Federal Reserve as part of efforts to stabilize systemically critical financial institutions.
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MARCH 17, 2009, 5:26 P.M. ET
AIG, Maiden Lane Will Pay $62 Billion to Settle Derivatives
American International Group Inc. and a U.S. Federal Reserve financial vehicle agreed to pay $62 billion to settle derivative transactions with 16 investment banks, getting in return securities whose market value had fallen below $30 billion, according to a regulatory filing.
The insurer and Maiden Lane III, a Fed vehicle created to bail out AIG, had previously disclosed their plan to settle AIG's credit default swaps, but hadn't disclosed details related to the derivatives' value and the amounts paid to settle obligations to each counterparty.
[..]
Societe Generale and Goldman Sachs were the biggest beneficiaries. Societe Generale held derivative contracts with a notional value of $16.4 billion, but a negative mark-to-market of $8.4 billion, according to the SEC filing. The French firm initially received nearly $9.6 billion as collateral from AIG, and Maiden Lane made up the difference of nearly $6.9 billion, according to AIG disclosures.
Goldman Sachs held derivative contracts with a notional value of $14 billion but a negative mark-to-market of $8 billion. AIG posted collateral of $8.4 billion and Maiden Lane added $5.6 billion to make up the difference.
AIG, which to date has received more than $170 billion in federal funds, said Maiden Lane paid a total of more than $27 billion to settle the derivative contracts. AIG Financial Products received an additional $2.5 billion from Maiden Lane, according to an AIG disclosure.
Last update: 4:39 p.m. EDT March 23, 2009Comments: 64
WASHINGTON (MarketWatch) -- The Treasury and the Federal Reserve released a joint statement Monday that spells out the different responsibilities of the two agencies in dealing with the financial crisis. In the most noteworthy part of the agreement, Treasury said it would take over the Fed's holding of assets of Bear Stearns and American International Group. Treasury did not say how it would pay for these programs and said it would only make the move "in the longer term and as its authorities permit." The Fed's investments in the three funds, known as Maiden Lane, totaled $72.21 billion in the latest week, according to Fed statistics.
http://www.federalreserve.gov/newsev.../20090323b.htm
For release at 4:30 p.m. EDT March 23, 2009
The Role of the Federal Reserve in Preserving Financial and Monetary Stability
Joint Statement by the Department of the Treasury and the Federal Reserve
[..]
In the longer term and as its authorities permit, the Treasury will seek to remove from the Federal Reserve's balance sheet, or to liquidate, the so-called Maiden Lane facilities made by the Federal Reserve as part of efforts to stabilize systemically critical financial institutions.
*****
MARCH 17, 2009, 5:26 P.M. ET
AIG, Maiden Lane Will Pay $62 Billion to Settle Derivatives
American International Group Inc. and a U.S. Federal Reserve financial vehicle agreed to pay $62 billion to settle derivative transactions with 16 investment banks, getting in return securities whose market value had fallen below $30 billion, according to a regulatory filing.
The insurer and Maiden Lane III, a Fed vehicle created to bail out AIG, had previously disclosed their plan to settle AIG's credit default swaps, but hadn't disclosed details related to the derivatives' value and the amounts paid to settle obligations to each counterparty.
[..]
Societe Generale and Goldman Sachs were the biggest beneficiaries. Societe Generale held derivative contracts with a notional value of $16.4 billion, but a negative mark-to-market of $8.4 billion, according to the SEC filing. The French firm initially received nearly $9.6 billion as collateral from AIG, and Maiden Lane made up the difference of nearly $6.9 billion, according to AIG disclosures.
Goldman Sachs held derivative contracts with a notional value of $14 billion but a negative mark-to-market of $8 billion. AIG posted collateral of $8.4 billion and Maiden Lane added $5.6 billion to make up the difference.
AIG, which to date has received more than $170 billion in federal funds, said Maiden Lane paid a total of more than $27 billion to settle the derivative contracts. AIG Financial Products received an additional $2.5 billion from Maiden Lane, according to an AIG disclosure.
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