In a very interesting piece of investigative journalism, Bloomberg is exploring the link between decisions made by the New York Fed under Treasury Secretary Timothy Geithner and billions of taxpayer dollars directed to select investment banks--including Goldman Sachs--at the height of the financial crisis in November 2008.
Under Geithner's leadership, the New York Fed made a decision to reimburse several banks in full for counterparty positions in credit-default swaps with AIG.
Bloomberg estimates that the decsion to reimburse Goldman Sachs and several other banks in full cost U.S. taxpayers at least $13 billion.
Further:
The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article.
Source: Bloomberg
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