Geithner Grilled In Court Over AIG Bailout
By MARCY GORDON, AP Business Writer | |
Associated Press |
On Tuesday, Geithner affirmed his belief that the bailout was needed to avert disaster for the financial system. Geithner was president of the New York Federal Reserve at the time of the rescue and later Treasury secretary.
A lawyer grilled Geithner at the trial of the lawsuit brought by former AIG Chairman and CEO
The
That statement was in line with testimony Monday by former Treasury Secretary
Geithner is expected to return Wednesday for a second day of testimony in the trial at the
Geithner was questioned for a full day by Greenberg's attorney,
He said he was "deeply involved" in discussions to determine an interest rate for the loan to AIG, which was set at about 12 percent annually.
Boies read from a
With Geithner giving AIG's then-CEO
Answered Geithner: "I don't know ... how I framed the deadline, but I made clear that we had very little time."
Geithner also acknowledged concern among New York Fed officials that AIG shareholders could vote to reject the government's terms for the loan.
In a moment of levity during the tedious back-and-forth, Boies — a famed litigator known for his fight for gay marriage and advocacy of
AIG nearly collapsed after making huge bets on mortgage investments that later soured. Federal regulators were concerned that if it were allowed to fail it would send shock waves through the financial system, which was already reeling after
AIG became a symbol for excessive risk on
The
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