A key lawmaker is seeking an investigation of reports that foreign American International Group Inc. counterparties have received preferential treatment.
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, calls for the investigation in a letter sent to Treasury Secretary Timothy Geithner and Federal Reserve Board Chairman Ben Bernanke.
Frank cites a letter from Rep. Spencer Bachus, R-Ala., the highest-ranking Republican on the Financial Services Committee.
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Bachus writes in the letter to Frank that foreign institutions that were counterparties of AIG, New York, have been paid in full in connection with efforts to unwind transactions in late 2008, while U.S. banks that were AIG counterparties were asked, in some cases, to accept “reductions of over 70% of the total debt owed them.”