Customarily, these types of bankruptcy settlement deals don’t result in a payment of 100 cents on the dollar. Instead, the recipient “takes a haircut” by accepting a very small settlement. For example, Eric Dinallo negotiated a similar settlement of credit default swaps when he was the Insurance Superintendent for the state of New York. At his behest, Merrill Lynch settled a case for only 13 cents on the dollar from a company “XL Guarantee.” Although, this time around, Merrill Lynch received 100% of their credit default swaps from AIG, $6.2 billion, because of the decision by the New York Federal Reserve.
President Obama was elected with an unofficial mandate to fundamentally change the culture of Washington and to root out this kind of corruption. However, his legacy will be forever tainted by his placements in key official positions. Tim Geithner, who had been the President of the New York Federal Reserve when the backdoor AIG deal took place. He was promoted by Obama to be the Secretary of the Treasury and in one of Geithner’s first acts in office he named a former Goldman Sachs lobbyist, Mark Patterson, as his top aide.
Geithner’s decisions from his days as the President of the New York Federal Reserve culminated into …show more content…
Typically, the revolving door doesn’t produce quality regulators, but Gensler, a former Goldman Sachs alum, is the exception to the rule. Gensler is a man who knows where the bodies are buried, akin to Joseph Kennedy when he became the first chairman of the SEC. Gensler was a one-man army who singlehandedly fought tooth and nail against the banking lobby. He also employed some of the corporate lobbyists’ sneaky tricks to force a significant portion of the derivatives market trading to be conducted through open exchanges, just like the stock or commodities
President Obama was elected with an unofficial mandate to fundamentally change the culture of Washington and to root out this kind of corruption. However, his legacy will be forever tainted by his placements in key official positions. Tim Geithner, who had been the President of the New York Federal Reserve when the backdoor AIG deal took place. He was promoted by Obama to be the Secretary of the Treasury and in one of Geithner’s first acts in office he named a former Goldman Sachs lobbyist, Mark Patterson, as his top aide.
Geithner’s decisions from his days as the President of the New York Federal Reserve culminated into …show more content…
Typically, the revolving door doesn’t produce quality regulators, but Gensler, a former Goldman Sachs alum, is the exception to the rule. Gensler is a man who knows where the bodies are buried, akin to Joseph Kennedy when he became the first chairman of the SEC. Gensler was a one-man army who singlehandedly fought tooth and nail against the banking lobby. He also employed some of the corporate lobbyists’ sneaky tricks to force a significant portion of the derivatives market trading to be conducted through open exchanges, just like the stock or commodities