Defendant Board of Governors Motion For Summary Judgment (Lawsuit #3)

Case 1:10-cv-00751-ABJ Document 13 Filed 06/08/11 Page 1 of 74

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
)
VERN McKINLEY, )
)
)
Plaintiff, )
)
v. ) Civil Action No.1: 1 0-cv-00751 (ABJ)
)
)
BOARD OF GOVERNORS OF )
THE FEDERAL RESERVE )
SYSTEM, )
Defendant. )
DECLARATION OF RICHARD M. ASHTON
I, Richard M. Ashton, declare as follows:
Background
1. I am Deputy General Counsel of the Board of Governors ofthe Federal Reserve System
(the "Board"). I have been Deputy General Counsel since 2005. Before being appointed
Deputy General Counsel, I was Associate General Counsel, a position that I held since
1985. Prior to that, I was Assistant General Counsel, a position that I held since 1982. I
joined the Board in 1976 as a staff attorney in the Legal Division.
2. In my position as Deputy General Counsel, I have responsibility for advising the Board
on legal matters pertaining to a wide range of domestic and international banking matters,
legislative matters, and overseeing the Litigation, Enforcement, and System Matters
Group of the Legal Division, which includes about 22 attorneys and additional support
staff.
Case 1:10-cv-00751-ABJ Document 13-11 Filed 06/08/11 Page 1 of 14
3. In my capacity as Deputy General Counsel, I was involved in the Board's consideration
of how to respond to the liquidity problems of American International Group ("AIG")
and the Board's September 16,2008 decision to authorize the Federal Reserve Bank of
New York ("FRBNY") to lend up to $85 billion to AIG, secured by substantially all of
the assets of AIG. I have been informed that some information involved in these
deliberations is responsive to a request under the Freedom of Information Act,S
U.S.c. 552 CFOIA"), made by Vern McKinley (the "plaintiff") to the Board by email
dated March 21, 2008 (FOIA # 2010-251) (the "AIG Request"). I have read that request
and am familiar with its contents. I have also reviewed the Vaughn index of responsive
documents provided to the plaintiff in connection with the AIG Request (the "AIG
Vaughn Index"). Accordingly, the statements contained in this declaration are based
upon my personal knowledge, upon information provided to me in my official capacity as
Deputy General Counsel, and upon conclusions and determinations reached and made in
accordance therewith.
Background RegardingAIG
4. The Board is a federal agency composed of seven members appointed by the President
and confirmed by Senate. In September 2008, there were five incumbent members ofthe
Board.
5. Under the Federal Reserve Act, the Board has various authorities to authorize extensions
of credit by the twelve regional Federal Reserve Banks ("FRBs"). In particular, section
13(3) of the Act, as in effect in 2008, provided that in unusual and exigent circumstances,
the Board, by the affirmative vote of not less than five members, may authorize any FRB
to extend credit to any individual, partnership, or corporation that is secured to the
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satisfaction of the lending FRB and meets other specified conditions. 12 U.S.c. 343
(2008).
6. On Friday, September 12,2008, officials of the FRBNY and the Board were notified by
officials of AIG of an impending liquidity crisis at AIG. Among other things, AIG
advised Federal Reserve staff of the company's i n ~ b i l i t y to roll over its maturing
commercial paper, ongoing collateral calls associated with the derivative exposures of its
financial products subsidiary, the withdrawal of securities lending counterparties from the
securities lending program operated by the company's regulated insurance subsidiaries,
and a potential downgrade ofthe company's credit ratings. At the time, AIG was one of
the largest insurance companies in the world with total assets of more than $1 trillion.
The Federal Reserve did not and does not have any supervisory authority over the
company.
7. In the next several days, AIG officials contacted Federal Reserve officials about the
possibility of an emergency loan from the Federal Reserve. The Federal Reserve strongly
encouraged the company to pursue private solutions to its problems. Over the next few
days, several senior staff members at the FRBNY and the Board, working with the
President ofthe FRBNY, Timothy Geithner, and several members of the Board,
including the Chairman and Vice Chairman, began to analyze and assess the extent and
implications ofthe imminent financial crisis facing AIG. Among other things, Federal
Reserve officials sought to form an opinion about the extent of the financial pressures
facing the company, about the availability and effectiveness of any financial assistance
from the private sector to resolve those pressures, about the likelihood and effectiveness
of any regulatory relief the company may receive from the supervisors of its insurance
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operations, and the potential for widespread effects on the financial system and economy
in general from AIG's financial troubles and possible collapse. The staff also considered
possible statutory changes that may have been appropriate to address the issues raised by
AIG's severe financial problems.
8. The purpose of this analysis was to assist and advise the Board members with regard to
any decision they may make about whether to exercise the Board's emergency powers,
including making a loan under section 13(3), should the circumstances relating to the
deterioration of AIG's financial condition warrant and, if so, how such powers should be
exercised.
9. In the days leading up to the Board's decision, Board members and staff requested
information and advice from officers and staff of the FRBNY in order to assist the Board
in weighing options and considering possible responses to the AIG liquidity crisis. The
FRBNY's views and advice played an important role in the Board's decision-making
process because, among other reasons, the FRBNY would make the actual loan to AIG
under the provisions of section 13(3) in effect at the time because AIG was headquartered
in New York. The Board solicited the FRBNY's opinions and advice as the potential
lending FRB regarding the method and advisability of lending to AIG. Moreover, section
13(3) at the time required that, should the Board authorize such a loan, the FRBNY
"obtain evidence" that AIG was "unable to secure adequate credit accommodations from
other banking institutions," and that any loan to AIG be "secured to the satisfaction" of
the FRBNY and subject to "such limitations, restrictions, and regulations" as the Board
might prescribe. 12 U.S.c. 343 (2008). As a result, the statutory criteria in effect
required the Board and FRBNY to act together to make a loan. In addition, because of
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the FRBNY's unique involvement in, and knowledge of, the financial markets through its
conduct of open market operations and intervention in foreign exchange markets on
behalf of the Federal Reserve System, the FRBNY was able rapidly to access and provide
infonnation about the possible impact on financial institutions and markets of making or
not making a loan. As a result, infonnation and advice from the FRBNY factored
prominently in the process leading up to the Board's ultimate decision on September 16,
2008 to authorize a loan to AIG.
10. As part of the process of fonnulating its opinions and views on the advisability of Federal
Reserve financial assistance with respect to AIG, Board officials sought the views and
advice of senior staff at the U.S. Department ofthe Treasury ("Treasury"), which has
responsibility and authority for financial stability issues generally.
11. On Monday, September 15, 2008, Lehman Brothers Holdings, Inc., a m ~ o r securities
finn, filed for bankruptcy. Later that evening, the three major ratings agencies
downgraded AIG's long-tenn debt ratings, resulting in substantial and immediate
liquidity demands on AIG. At the same time, private investors and lenders tenninated
their negotiations with AIG relating to a private sector solution to AIG's liquidity stresses
and no such solution was reached.
12. At a meeting on Tuesday, September 16,2008, the Board, pursuant to section 13(3) and
with the full support of the Treasury, authorized the FRBNY to extend credit to AIG in
an amount up to $85 billion, secured by substantially all ofthe assets of AIG. President
Geithner and other senior officials of the FRBNY as well as senior officials of the
Treasury participated in this meeting.
13. As a legal officer of the Board, I personally participated in the Board's analysis and
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assessment of possible responses to AI G' s financial distress and in the Board's ultimate
decision to authorize emergency lending by assisting the Board's General Counsel,
including participating in several conference calls with FRBNY staff and with AIG
officials. I also participated in the Board's September 16
th
meeting at which the loan to
AIG was authorized. I received or sent several of the email communications and
documents discussed below that are subject to plaintiffs FOIA request, as shown on the
face of the documents, and, in connection with preparing this declaration, have also
reviewed other relevant documents that I did not personally send or receive.
The Vaughn Index Documents
14. As a result of my participation in the Board's analytical and decision-making process and
my review of the responsive documents, I am familiar with the information the Board
considered in reaching the September 16,2008 decision regarding lending to AIG, and
the information Board staff considered in providing advice to the Board regarding that
decision. This includes: (i) the information contained in the emails, attachments, and
memos between Board staff, FRBNY staff, and staffs of other Federal Reserve Banks
described in ~ ~ 15-17 below; (ii) the draft and final memos from Board staff to the Board
or more senior Board staff members described in ~ ~ 18-19 below; and (iii) information
contained in the emails and attachments among Board members and Board staff
described in ~ 20 below. It also includes communications between Board members and
staff and staff of other agencies, in particular, the Treasury, and a firm hired as a
consultant to the Treasury, described in" 21 below. The documents described below all
were related to the process of deliberation leading up to the Board's September 16, 2008
decision to authorize the FRBNY to extend a loan to AIG.
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Pre-decisional, Deliberative Communications with the FRBNYand Other FRBs
15. Among the communications that played a part in the Board's decision-making process
were emails and attachments between Board staff and FRBNY staff. These staff-to-staff
communications are identified on the AIG Vaughn Index (FOIA 2010-251) (hereinafter
"AIG Vaughn Index") as documents numbered 000092, 96, 98, 103, 104, 162, 164, 169
170,262,289,292,294,300,303,377-78,384,385,432,442-445,461,462,555,669,
679, 726,878,915,939,945,946,955,960,965,967,968,982, 1075, 1079, and 1119
1134. All but one of these emails and attachments are dated between September 13,2008
and September 16, 2008, before the Board's decision. That document, email 001119-20,
and attachments 001121-34, dated September 17, 2008, transmitted prior staff proposals
and analyses underlying a summary document provided to FRBNY President Geithner on
the morning of September 16,2008. Although FRBNY staff distributed the attachments
before the Board's September 16, 2008 decision, the FRBNY staff member forwarded
them to the Board on September 17, 2008 to ensure that all involved staff members had
the same set of attachments. The opinions, information, and weighing of options
conveyed in these emails were relevant to the process of deciding how the Board should
address AIG's severe financial distress. For example, email 000096 provides FRBNY
staffs summary of a September 13,2008 conference call among AIG, Board, and
FRBNY staff. In the email, FRBNY staff provides its candid assessment of information
presented by AIG during the conference call. By way of further example, in email
000169-170, an FRBNY staff member provides her impressions of AIG' s request for
advice on how to inform the Treasury of its funding situation, and ofthe New York State
Insurance Department's ("NYSID's") plans with respect to AIG. Document 000375 is an
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attachment to an email from FRB Richmond summarizing a conference call among
supervisory staff at a number ofFRBs, including FRBNY, exchangIng preliminary views
on whether an AIG bankruptcy would raise systemic risk issues and possible strategies in
addressing AIG's severe financial distress. Document 000442-445 is a Board staff
member's notes on a conference call with NYSID regulators regarding AIG, circulated to
more senior Board staff and FRBNY staff, containing the staff member's recounting of
information provided by AIG and reflecting the staff member's views regarding that
information. Because of the frank and unvarnished views exchanged in these emails, and
the preliminary nature of many of the opinions expressed, disclosure would inhibit the
candid exchange of information between Board and FRBNY staff that is critical to the
Board's decision-making process.
16. An additional group of communications that factored into the Board's decision-making
process were emails among Board members, Board staff, and FRBNY President
Geithner. These documents are identified on the AIG Vaughn Index as documents
numbered 000072, 78, 127, 135,412,447,518, and 885-88. In these pre-decisional
communications, individual members of the Board, Board staff, and President Geithner
discuss their preliminary reactions to AIG's liquidity crisis, possible responses to AIG's
funding shortfall, and the pros and cons of various options. For example, document
000135 is an email from then-Vice Chairman Kohn to Chairman Bernanke, Governor
Warsh and President Geithner, and General Counsel Scott Alvarez's response, reacting to
information Board members had received regarding AIG's liquidity situation and
discussing issues raised by AIG's proposals. Document 000412 is an email from Vice
Chairman Kohn to President Geithner discussing pros and cons oflending to AIG.
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Communications such as these were an important part ofthe decision-making process
because they allowed individual Board members, President Geithner, and staff to
exchange preliminary views on issues of concern in advance of a formal Board meeting
and vote. Because it is essential for individual Board members to be able candidly to
discuss their views in advance of a decision without concern that the communications
will be made public, disclosure of these emails would have a chilling effect on the
decision-making process.
17. Finally, staff of the FRBNY provided Board staff with a number of emails attaching draft
memoranda and analyses regarding risks posed by a possible AIG bankruptcy and the
pros and cons oflending to AIG. These pre-decisional emails and attachments, identified
on the AIG Vaughn Index as documents numbered 000130-134, 262-265,377-380 and
402-410, were relevant to the Board's overall decision-making process. For example,
document 000130-134 is an attachment to a September 13,2008 email from an FRBNY
staff member to a Board staff member in the Division of Research and Statistics (HR&S")
who was involved in assessing the severity of AIG's financial distress and in formulating
views regarding a possible loan to AIG. The document presents the FRBNY staff
member's preliminary analysis and charts he prepared depicting risks posed to the
financial system of a possible AIG bankruptcy. Documents 000402-410 are attachments
to a September 14, 2008 email forwarded by President Geithner to Chairman Bernanke
and Vice Chairman Kohn, with copies to other FRBNY staff members. Included among
the attachments is a staff memorandum presenting the views of FRBNY staff on the pros
and cons of lending to AIG, a spreadsheet provided by AIG detailing the staffs estimates
of the amounts firms stood to lose in the event of an AIG bankruptcy, and FRBNY staff
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commentary on a Power Point presentation based on publicly available information
regarding AIG subsidiaries. The cover email, which was provided to plaintiff, expresses
FRBNY staffs views on the "relevant column" ofthe spreadsheet. These preliminary
opinions and analyses of FRBNY staff members were taken into account by the Board
and Board staff in considering the possible effects on other financial institutions and the
financial system of an AIG bankruptcy, and played a part in the Board's decision-making
process. Disclosure would chill the candid exchange of ideas that is central to the
Pre-Decisional, Draft and Final Memoranda
18. As part of the Board's process of deciding whether to authorize the FRBNY to extend a
loan to AIG, Board staff in the Divisions of Monetary Affairs ("MA"), R&S, Bank
Supervision and Regulation ("BS&R"), and the Legal Division began drafting a memo to
the Board outlining various issues relating to AIG's liquidity problems. Various drafts of
this memo, as well as excerpts from and comments on the draft, were circulated among
Board staff and Board members between September 13, 2008 and September 15, 2008.
These drafts, excerpts, and comments are listed in the AI G Vaughn Index as documents
numbered 000087-90, 102, 109-110, 140-146, 172-180, 182-189,253-260,302,306-317,
321-331,336-346,360-368,387-398,416-423, 467-475, 478-489, 498-509, 703-715,
752-764, 778-789. Among the issues discussed in the draft memo were Board staff s
assessment of AIG's solvency, possible spillover effects on financial firms and markets
of an AIG bankruptcy, incremental benefits of lending to ArG, and possible
consequences of not lending to AIG. This draft memo was never put into final form for
the Board, and the process of circulating and commenting on the draft informed staffs
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thinking regarding the unfolding AIG liquidity crisis in preparation for an anticipated
Board decision with regard to emergency lending to AIG. Some of the drafts are
redlined, showing in detail portions that were stricken and new materials that were added,
revealing in detail the evolution of Board staffs recommendations to the Board. It is my
opinion that disclosure of these pre-decisional drafts would inhibit the frank exchange of
ideas among members ofthe Board's staff to the detriment of the Board's decision
making process.
19. In addition to the draft memo described in ~ 18 above, the Board's Division of Research
and Statistics ("R&S") prepared a shorter memo, which was provided to the Board
members before the September 16, 2008 meeting. That memo provided Board members
with staffs analysis of current conditions in the commercial paper markets and contains
staffs view of AIG's recent experience in the commercial paper market. Drafts of the
R&S memo circulated before the Board meeting on September 16,2008 are listed in the
AIG Vaughn Index as documents numbered 000893,898-899,911-912,929-931,970
971,973-974. The final R&S memo sent to Board members on September 16, 2008, is
identified on the AIG Vaughn Index as document 001086-1093. In addition, staff in the
Board's Public Affairs Office prepared draft public statements for Chairman Bemanke
describing the background and rationale for the Board's decision to lend to AIG, which
are identified in the AI G Vaughn Index as documents 001112 and 001116. Finally, staff
in the Board's Division of Monetary Affairs drafted a memo for the division director,
dated September 13,2008, identified in the AIG Vaughn Index as document number
000056-61, which provided staffs analysis of AIG's operations and current difficulties.
This draft memo was for the division director's use in advising the Board on AIG-related
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matters. These drafts played a part in the Board's ongoing process, between September
13 and September 16,2008, of weighing options and, ultimately, deciding to authorize
the FRBNY to extend a loan to AIG. Because the drafts map staffs editing process, and
the final memos contain staffs candid views relating to AIG, disclosure would have a
chilling effect on communications among Board staff and the Board that are vital to the
Intra Agency Communications Among Board Members and Board Staff
20. In the days leading up to the Board's September 16,2008 decision to authorize the AIG
loan, Board members were in frequent communication with Board staffto obtain
information, monitor developments, and discuss possible responses to AIG's unfolding
liquidity crisis. Given the rapid pace of events, there was often no time for formal
meetings. Rather, Board members and staff exchanged views and discussed options
through a number of channels, including emails. The following documents on the AIG
Vaughn Index are emails dated between September 13,2008 and September 16, 2008
among individual members ofthe Board exchanging infonnation and preliminary views
on how the Board might respond to AIG's liquidity problems: 000083, 121 and 871. The
AIG Vaughn Index also identities a number of emails among individual Board members
and Board staff dated September 15 and 16,2008 discussing strategies regarding AIG
and procedures for the upcoming Board meeting. These emails are numbered: 000495,
752,848,854,855-860,869,885-888,900-901, 1095-1096. Finally, the AIG Vaughn
Index identifies a number of emails dated September 13, 2008 through September 16,
2008 among members of the Board's staff. These pre-decisional emails among Board
staff discuss the staffs views on developments, issues, risks, strategies, and pros and
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cons oflending to AIG, and helped inform staffs discussions with the Board regarding
AIG. Theseemailsarenumbered: 000115-116,135,136,139,140,166,171,203,261,
286,318,411,466-467,625,667,678, 748, 749, 778, 790, 863, 884, 929 and 1110. The
emails discussed above allowed Board members and staff to exchange preliminary views
and information regarding rapidly unfolding events and to discuss possible advantages
and pitfalls of various courses of action. Disclosure of communications such as these
would chill candid discussions among Board members and staff that are essential to the
Inter-Agency Communications with Treasury
21. Finally, in addition to the communications described above, Board staff, Board members,
and FRBNY President Geithner communicated with staff at the Treasury concerning the
Treasury's views on possible financial assistance to AIG. These inter-agency
communications are identified on the AIG Vaughn Index as documents numbered:
000865-866,891,895,903,904,909,918-924,979-980,981,984,989,1094,1104
1108, 1109 and 1113. These communications were relevant to the Board's decision on
whether and how to lend to AIG. For example, document 000865-866 is an email from
Treasury General Counsel Robert Hoyt to a number of Treasury officials, FRBNY
President Geithner, and General Counsel Scott Alvarez outlining a number of Treasury
staffs views on options regarding the use of existing agency authority to address AIG's
liquidity crisis. Several of the emails that followed comment on these options.
Document 000918-924 was a draft legislative proposal crafted for consideration as a
response to AIG's funding crisis prepared by a Board Assistant General Counsel and
circulated to the Board's General Counsel and a Treasury officiaL Documents 000979
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980,981,984,989 and 1094 were emails between the Board's General Counsel and a
Treasury official following up on this proposal. Documents 0001104-1108 and 1109 are
attachments to a September 16, 2008 email from Robert Scully, of Morgan Stanley, to
Governor Warsh forwarding an email and attachments from Morgan Stanley analyzing
the implications of an AIG bankruptcy and providing a "To Do" list of suggested actions
and a timetable. Treasury had retained Morgan Stanley as a contractor and paid
consultant to provide information related to financial stability issues, as noted on the face
of the first attachment. These inter-agency communications with Treasury were among
the many sources of information and opinions upon which Board and Board staff
members drew in the hours leading up to the Board's decision to authorize the loan to
AIG. Disclosure of these inter-agency communications would chill the candor of
discussions among officials of various agencies that are vital to the Board's decision-
making process.
I declare under penalty of perjury that the foregoing is true and correct. Executed in the city of
Washington, D.C. on this ~ l A a a y of June, 2011.
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UNITED STATES DISTRICT COURT
)
)
VERN McKINLEY, )
)
)
Plaintiff, )
)
v. ) Civil Action No.1: 1O-cv-00751 (ABJ)
)
)
SYSTEM, )
Defendant. )
DECLARATION OF ALISON M. THRO
I, Alison M. Thro, declare as follows:
BACKGROUND
1. I am a Senior Counsel in the Legal Division ofthe Board of Governors of the Federal
Reserve System ("Board"), and have been employed as an attorney at the Board since
March 31, 1998. Since 2004, I have been the most senior attorney in the Board's Legal
Division responsible for reviewing FOIA requests. My primary responsibilities include
supervising the processing of requests for information received under FOIA, and
providing legal advice on issues related to FOIA, including the applicability ofthe FOIA
exemptions. As a result of my extensive involvement in processing FOIA requests for
the Board, I am: (l) familiar with the types of records maintained by the Board and the
places in which and persons by whom records are maintained; (2) experienced in
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searching the variety of records that are kept by the Board in response to a FOIA request;
(3) familiar with the FOIA, its requirements for and the exemptions from disclosure; and
(4) experienced in judging whether documents are responsive and should be produced in
full, redacted, or withheld in their entirety. I was responsible for processing requests
under the Freedom of Information Act, 5 U.S.C. 552 (the "Act" or "FOIA") made by
Vern McKinley ("plaintiff') to the Board bye-mail dated March 21, 2010 (the "AIG
Request") and March 28,2010 (the "Lehman Request") that are at issue in this case.
Accordingly, I have personal knowledge ofthe facts herein.
2. When a request is made under FOIA for information that is not "published information
and records" as described in 12 C.F.R. 261.10 and .11, and that has not been
previously cleared for release to the public, it has been the Board's practice to assign such
requests to the Legal Division for review and processing. In general, when such a FOIA
request is made, the Board's FOIA Office makes a preliminary review of the request and
assembles any responsive documents under its control. The FOIA Office then sends the
request to the Legal Division for processing. The Legal Division contacts other divisions
that may have responsive documents. When appropriate, the Legal Division also contacts
relevant Federal Reserve Bank staff to determine if they have responsive Board records
subject to FOIA. As part of my responsibilities for processing FOIA requests, I, or Legal
Division staff members or contract attorneys working under my direction, review the
responsive materials and identifY any documents or portions of documents that are
exempt from disclosure under any of the exemptions in the FOIA. We then draft a
responsive letter for the Board's Office of the Secretary responding to the FOrA request
and identifYing any exemptions that may apply to the requested information.
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PROCESSING OF THE AIG REQUEST
3. The AIG Request sought
further detail on information contained on p. 3 of the following minutes of the
Board of Governors of the Federal Reserve dated September 16, 2008:
http://www.federalreserve.gov/newsevents/press/monetary/monetary20090311 a 1.
pdf The source of the power referenced in the minutes is Section 13(3) of the
Federal Reserve Act. In particular, I am requesting any and all communications
and records concerning or relating to the Board's decision that detail that 'the
disorderly failure of AIG was likely to have a systemic effect on financial markets
that were already experiencing a significant level of fragility' as described in the
meeting minutes."
A true and correct copy of the AIG Request, dated March 21, 2010, is attached hereto as
Exhibit A.
4. By letter dated March 22, 2010, the Manager of the Freedom of Information Office at the
Board ("FOI Office") acknowledged receipt ofthe AIG Request and granted the
plaintiffs request for a fee waiver. A true and correct copy of the March 22, 2010 letter
is attached hereto as Exhibit B.
5. By letter dated April 19, 2010, the Manager ofthe FOI Office informed the plaintiff that
the Board was extending the period for the Board's response to the AIG Request until
May 3, 2010 pursuant to section (a)(6)(B)(i) ofthe FOIA in order to consult with another
agency or with two or more components of the Board. A true and correct copy of the
April 19, 2010 letter is attached hereto as Exhibit C.
6. By letter dated November 9, 2010, following the search and identification process
discussed below in paragraphs 15-26, the Secretary of the Board informed the plaintiff
that staffhad searched Board records, and had found a large number of documents
responsive to the AIG Request. The letter informed the plaintiffthat information being
released to him showed that staff: monitored the rapid liquidity drain on AIG; gathered
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intelligence on AIG and its structure, counterparty exposures, and market risk positioning
from public and internal sources and from discussions with other regulators; evaluated
AIG's solvency and liquidity and collateral valuations; and monitored a variety of other
subjects detailed in the letter. The letter informed the plaintiff that the Secretary had
determined that the remaining documents contained exempt information subject to
withholding under authority of Exemptions 4,5,6, and 8 of the Act, respectively 5
u.S.c. 552(b)(4), (b)(5), (b)(6), and (b)(8). The Secretary authorized disclosure of all
reasonably segregable non-exempt information to the plaintiff. The letter informed
plaintiff that his request was granted in part and denied in part, and that he was not
required to exhaust administrative remedies, but had the right to do so. By letter dated
May 27, 2011 to the plaintiff, the Associate Secretary of the Board authorized the release
of one additional page which had previously been withheld in part. Of 1134 total pages
provided to the plaintiff, 246 pages were provided in full, 339 pages were provided in
part, and 549 pages were withheld in full. The pages provided to the plaintiff bore bates
numbers beginning with the prefix "BOG-FOIA 10-251" (a reference to the Board's
internal processing number, 2010-251, assigned to the AIG Request) and running from
000001 through 001134. A true and correct copy of the November 9,2010 letter
(without enclosure) is attached hereto as Exhibit D.
PROCESSING OF THE LEHMAN REQUEST
7. The Lehman Request sought
any and all communications and records regarding analysis undertaken regarding
Lehman Brothers and the assessment in September 2008 or earlier of what
'contagion' might have flowed from Lehman Brothers' filing of bankruptcy as the
word contagion was used in the case of the Board of Governors' deliberations
over Bear Steams: http://www.federalreserve. gov Inewsevents/press/ other/other
20080627al.pdf or 'systemic effect on financial markets' that may have flowed
4
from a Lehman bankruptcy as the phrase was used in the Board of Governors'
deliberations over American International Group (page 3):
http://w\\-w.federalreserve.gov !newsevents!press!monetary!monetary20090311 a 1.
pdf. The analysis would likely have been undertaken in the context of
considering whether to take action under Section 13(3) of the Federal Reserve Act
to avoid a Lehman bankruptcy.
A true and correct copy of the Lehman Request, dated March 28, 2010, is attached hereto
as Exhibit E.
8. By letter dated March 30,2010, the Manager ofthe FO! Office acknowledged receipt of
the Lehman Request and confirmed the Board's assumption that plaintiff would pay all
fees incurred in the processing ofthe Lehman Request, up to $200. A true and correct
copy of the March 30, 2010 letter is attached hereto as Exhibit F.
9. By letter dated April 26, 2010, the Manager ofthe FOI Office informed the plaintiff that
the Board was extending the period for the Board's response to the AIG Request until
May 10,2010 pursuant to section (a)(6)(B)(i) of the FOIA in order to consult with
another agency or with two or more components of the Board. A true and correct copy of
the April 26, 2010 letter is attached hereto as Exhibit G.
10. By letter dated November 9, 2010, following the search and identification process
discussed below in paragraphs 15-26 below, the Secretary ofthe Board informed the
plaintiff that staff had searched Board records, and had found a large volume of
information responsive to the Lehman Request. The letter informed the plaintiff that
information being released to him showed that staff systematically monitored the
potential impact of Lehman's declining financial condition on the trip arty repo, OTe
derivatives, and commercial paper markets and large financial institutions in the days
preceding Lehman's bankruptcy, and a variety of other subjects detailed in the letter. The
letter informed the plaintiff that the Secretary had determined that the remaining
5
documents contained exempt information subject to withholding under authority of
Exemptions 2,4,5,6, and 8 of the Act, respectively 5 U.S.C. 552(b)(2), (b)(4), (b)(5),
(b)( 6), and (b )(8). The Secretary authorized disclosure of all reasonably segregable non
exempt information to the plaintiff. The letter informed plaintiff that his request was
granted in part and denied in part, and that he was not required to exhaust administrative
remedies, but had the right to do so. By letter dated May 27, 2011 to the plaintiff, the
Associate Secretary of the Board authorized the release of an additional 33 pages which
had previously been withheld in part or in full. Of 1254 total pages provided to the
plaintiff, 329 pages were provided in full, 412 pages were provided in part, and 513 pages
were withheld in full. The pages provided to the plaintiff bore bates numbers beginning
with the prefix "BOG-FOIA 1 0-267" (a reference to the Board's internal processing
number, 2010-267, assigned to the Lehman Request) and running from 000001 through
001254. A true and correct copy ofthe November 9,2010 letter (without enclosure) is
attached hereto as Exhibit H. Adding together the numbers for the AIG Request and the
Lehman Request, of2388 total pages provided to plaintiff, 575 pages were provided in
full, 751 pages were provided in part, and 1062 pages were withheld in full.
THE PROJECT COLLECT DATABASES
11. As part of my duties in connection with FOIA, I was aware that on September 16, 2008,
the Board had authorized the Federal Reserve Bank of New York ("FRBNY") to extend a
loan to AIG (the "AIG Loan"). The decision to authorize the AIG Loan was in response
to information that began to emerge on or around September 12, 2008, that AIG was
experiencing severe liquidity problems and might have to declare bankruptcy in the near
term. As part of my duties in connection with FOIA, I was also aware that, beginning in
6
March 2008, Lehman Brothers, along with other primary dealers, had access to Federal
Reserve emergency funding at the Primary Dealer Credit Facility ("PDCF"). I was aware
that throughout the summer of 2008, Lehman experienced worsening capital and liquidity
shortfalls and that, over the weekend of September 13-15, 2008, the FRBNY, Board, U.S.
Department ofthe Treasury ("Treasury"), and Securities and Exchange Commission
("SEC") brought together leaders of m ~ i o r financial firms at the FRBNY in an attempt to
craft a private sector solution. No solution could be crafted and Lehman Brothers
declared bankruptcy on September 15,2008.
12. Because ofthe public interest in the AIG Loan and Lehman Brothers' bankruptcy, the
Board received an unprecedented number of requests for information regarding these
events from, among others, members of Congress and FOIA requesters. In response, the
General Counsel directed Legal Division staff to gather all material relating to the AIG
Loan and the Lehman Brothers bankruptcy, among other topics, as part of a larger effort
to collect documents relating to the Federal Reserve's response to the financial crisis,
known as Project Collect. I had overall responsibility for Project Collect. Project Collect
involved the creation of two repositories of documents, one consisting of emails and the
other consisting of electronic documents (native born and converted). The collection
initiative was designed to gather in these two repositories all Board documents that could
be responsive to a large number of broad requests for information relating to the Board's
response to the financial crisis. Some of those requests, like the plaintiff's, sought
information regarding the Board's decision that the disorderly failure of AIG could have
a systemic effects on the financial markets and information regarding the Board's
7
analysis that systemic effects on financial markets may have flowed from a Lehman
Brothers bankruptcy.
13. As ofthe time ofthe AIG Loan and the Lehman Brothers bankruptcy searches described
in paragraphs 15-26 below, the Project Collect databases contained Board records from
August 2007 through May 2009 and beyond relating to the Federal Reserve's response to
the financial crisis, including the AIG Loan and the Lehman Brothers bankruptcy. In
creating the Project Collect databases, I worked with other staff in the Legal Division, the
Office of the Secretary of the Board (the custodian of Board records), and the Division of
Information Technology. We contacted approximately 300 Board members, officers, and
staff to determine ifthey had, or were aware of, responsive information. Based on these
discussions, we initially collected documents from approximately 170 Board members,
officers, and staff. As a result of subsequent collections, we obtained documents from a
total of approximately 190-200 Board members, officers, and staff in nine divisions
(Monetary Affairs, Reserve Bank Operations and Payment Systems, Office of Board
Members, Office of the Secretary, Legal, International Finance, Banking Supervision and
Regulation, Research and Statistics, and Consumer and Community Affairs) who were
involved in any aspect of the Board's response to the financial crisis. Among other
topics, we contacted those involved in the response to Lehman Brothers' capital and
liquidity crisis as well as those involved in the response to AIG's liquidity crisis and
request for the AIG Loan. In particular, we sought all documents relating to AIG from
January 1,2008 through the date of the collection and all documents relating to Lehman
Brothers from January 1,2008 through the date ofthe collection. We identified staff
members involved in the Lehman and AIG matters by starting with a core group of staff
8
involved in these matters and asking them, and subsequent interviewees, to identify any
other Board staff who might have responsive documents. As a result, I was satisfied that
we had identified all Board and Board staff members who were likely to have documents
relating to the AIG Loan and the Lehman Brothers bankruptcy. We held meetings with
some of the staff members and contacted others by telephone and email. We described
the FOIA and Congressional requests the Board had received, including requests for
information relating to the AIG Loan and the Lehman Brothers bankruptcy, discussed the
staff members' specific roles in the Board's actions, and asked the staff members to
forward any potentially responsive documents for inclusion in the Project Collect
databases. We considered our search to be broad enough to capture all Board documents
responsive to any FOIA or other request for information relating to the Board's response
to the financial crisis, including requests for information about the AIG Loan or the
Lehman Brothers bankruptcy.
14. In response to our contacts with the approximately 300 Board members, officers and staff
and collection of documents from approximately 170 of them between May and June
2009, the Legal Division received nearly 700,000 emails and approximately 105,000
electronic documents for inclusion in the Project Collect databases. It is my belief that
any Board record subject to FOIA responsive to the AIG Request and the Lehman
Request would be contained in the Project Collect databases. In conducting searches in
response to the AIG and Lehman Requests, IT staff created "spoke" databases containing
all e-mails and electronic documents relating to the AIG Loan and Lehman bankruptcy,
respectively. We searched in the spoke databases to identify responsive documents
subject to FOIA, rather than in the master databases, because they were faster to search
9
than the full Project Collect databases, while still containing all documents relevant or
responsive to a particular request.
THE SEARCH FOR DOCUMENTS RESPONSIVE TO THE AIG REQUEST
15. In response to a very broad request by another entity for documents relating to the AIG
Loan and other AIG-related topics, beginning in February 2010 and continuing for
several months, contract attorneys working for the Board searched the AIG spoke
databases to identify a core set of emails and electronic materials documenting the
Board's response to the crisis at AIG and decision to authorize FRBNY to provide
financial assistance, including the AIG Loan, to the company. In my view, this search
was broad enough to encompass all documents subject to FOIA potentially responsive to
the AIG Request. At my direction, one of the contract attorneys conducted a
chronological search of documents identified in this earlier search, focusing on materials
from September 2008, to identify a core subset of materials responsive to the AIG
Request.
16. Beginning in September 2010 and continuing through early November 2010, when this
search was completed, I personally reviewed the core subset of emails and electronic
documents for completeness, responsiveness to the AIG Request, and exempt
information. I conducted a chronological review of all AIG emails from September
2008. I personally reviewed each memo, email, email attachment, or document multiple
times to determine ifit contained information subject to FOIA responsive to plaintiff's
request for "any and all communications and records concerning or relating to the
Board's decision" that the '''disorderly failure of AIG was likely to have a systemic effect
on financial markets that were already experiencing a significant level of fragility.'" I
10
identified and eliminated a large volume of duplicate materials. Where documents,
memos or emails referenced other potentially responsive infonnation, I confirmed that
the information was included in the spoke databases. Using this process, I believe that I
captured the widest possible range of information subject to FOIA responsive to the AIG
Request.
17. From my preliminary email and document reviews, it became evident that materials
underlying the Board's ultimate September 16,2008 decision to make the AIG Loan fell
approximately within the Sept. 12 through Sept. 17,2008 date range. Accordingly, after
preliminary reviews of emails falling within a broader date range, I focused subsequent
chronological searches and reviews on the September 12-17,2008, timeframe. It became
evident that some ofthe matters Board members, officers, and staff considered in the
days leading up to authorization of the AIG Loan were: AIG's liquidity situation; its
structure, counterparty exposure, market risk positioning; AIG's solvency and liquidity
and collateral valuations; exposure oflarge financial institutions to AIG; AIG's
participation in the commercial paper markets and payment and settlement systems; pros
and cons oflending to AIG and alternatives to a loan; and systemic risks posed by an
AIG bankruptcy.
18. After identifYing a core set of responsive, nonduplicative emails and documents, I
reviewed the materials for potentially exempt information. Each page was carefully
reviewed, and the redactions I made were highly circumscribed. In many instances, the
redactions amount to no more than a few words, such as the identity of a financial
institution or a few phrases. Pages were withheld in full only when they contained no
reasonably segregable nonexempt material. The exemption claimed is noted on the
11
documents provided to the plaintiff using designators such as "(b)(4)" or "(b)(5)" over
the redactions. The term "duplicate" appears where duplicate material was redacted.
These responsive documents, as redacted, were provided to the plaintiff as set forth in
paragraph 6 above.
19. In connection with this litigation, I worked with other members ofthe Board's Legal
Division and a contract attorney to create the AIG Vaughn Index, attached to this
declaration as Exhibit 1. The AIG Vaughn Index accurately identifies each document or
portion of a document withheld from the plaintiff on the basis of a FOIA exemption by
bates number and by written description; describes the document or portion withheld;
explains the basis for the claimed exemption; and states whether the pages described
were withheld in full or redacted. For a small number of documents, additional or
different exemptions are claimed on the AIG Vaughn Index than listed on the document
provided to the plaintiff. In those few cases, the Vaughn Index reflects our final claim of
exemption with respect to those documents. The AIG Vaughn Index notes where
duplicate documents were provided to the plaintiff but inadvertently not marked as
duplicates. The Board's claim of exemption for these inadvertent duplicates is the same
as for the original document.
THE SEARCH FOR DOCUMENTS RESPONSIVE TO THE LEHMAN REQUEST
20. As described in paragraphs 11-14 above, documents potentially responsive to the Lehman
Request were collected from May to June 2009 and stored in the Project Collect email
and electronic document databases. Because the Project Collect databases broadly
captured any Board record relating to Lehman Brothers from January 1,2008 through the
date of the collection in June 2009, I believed that any document subject to FOIA
12
potentially responsive to the Lehman Request would be stored in those databases. In
February 2010, all emails and documents in the Project Collect databases related to
Lehman were segregated into "spoke" databases for ease of review.
21. Beginning in February 2010 and continuing for several months, contract attorneys
working for the Board searched the Lehman spoke databases to identify a core set of
emails and electronic materials documenting financial difficulties at Lehman and the
internal agency deliberations that preceded and coincided with the company's decision in
September 2008 to declare bankruptcy. In my view, this search was broad enough to
encompass all documents subject to FOIA potentially responsive to the Lehman Request.
22. Beginning in August 2010, at my direction and under my supervision, a contract attorney
described in paragraph 15 above who performed a preliminary search for responsive AIG
documents conducted a first level review of the core set of Lehman emails for
responsiveness to the Lehman Request. The attorney concentrated her search on emails
from September 2008. I personally reviewed the results of this preliminary search and
determined that most ofthe documents uncovered were focused on the FRBNY's review
and analysis ofthe possible effects of a Lehman bankruptcy. Based on my experience
with prior FOIA searches, I believed that the Board potentially had additional responsive
documents regarding "the analysis undertaken regarding 'Lehman Brothers' and the
assessment in September 2008 or earlier of what 'contagion' or 'systemic effect on
financial markets' may have flowed from a Lehman Brothers bankruptcy filing.
Accordingly, I asked another contract attorney to conduct two expanded searches
covering the time period March 1 - September 15,2008. As a result of these searches,
the attorneys identified a core subset of materials responsive to the Lehman Request.
13
23. I reviewed the core subset of responsive materials for completeness, responsiveness to
the Lehman Request, and exempt information. In conducting this review, I specifically
focused on emails and documents relating to the contagion effects or risks to the financial
system that may be posed by a Lehman Brothers bankruptcy.
24. I first conducted a chronological review of all Lehman emails identified above from
March through September 2008. I personally reviewed each email and email attachment
multiple times to determine if it contained information responsive to the Lehman
Request. I identified and eliminated a large volume of duplicate materials. Where
documents or emails referenced other potentially responsive information, I confirmed
that the information was included in the spoke databases and personally reviewed it for
responsiveness. Using this process, I believe that I captured the widest possible range of
information subject to FOIA responsive to the Lehman Request. As described more fully
in the Secretary's November 9,2010 letter attached as Exhibit H, responsive materials
consisted primarily of emails and attachments to emails, including spreadsheets, which
documented the unfolding analysis of Board and FRBNY staff of the effects of a Lehman
Brothers bankruptcy on the triparty repo, over-the-counter derivatives and commercial
paper markets and clearance and settlement systems, as well as efforts to contain the
risks, to facilitate a solution to Lehman's worsening capital and liquidity situation, and to
ensure effective and timely communications with domestic and international supervisors.
25. I reviewed the responsive documents for potentially exempt information. Each page was
carefully reviewed, and the redactions I made were highly circumscribed. In many
instances, the redactions amount to no more than a few words, such as the identity of a
financial institution or a few phrases. Pages were withheld in full only when they
14
contained no reasonably segregable nonexempt material. The exemption claimed is
noted on the documents provided to the plaintiff using designators such as "(b)( 4)" or
"(b)(5)" over the redactions. The term "duplicate" appears where duplicate material was
redacted. These responsive documents, as redacted, were provided to the plaintiff as set
forth in paragraph 1 0 above.
26. In connection with this litigation, I worked with other members of the Board's Legal
Division and a contract attorney to create the Lehman Vaughn Index, attached to this
declaration as Exhibit J. The Lehman Vaughn Index accurately identifies each document
or portion of a document withheld from the plaintiff on the basis of a FOIA exemption by
bates number and by written description; describes the document or portion withheld;
explains the basis for the claimed exemption; and states whether the pages described
were withheld in full or redacted. For a small number of documents, additional or
different exemptions are claimed on the Lehman Vaughn Index than listed on the
document provided to the plaintiff. In those few cases, the Vaughn Index reflects our
final claim of exemption with respect to those documents. The Lehman Vaughn Index
notes where duplicate documents were provided to the plaintiff but inadvertently not
marked as duplicates. The Board's claim of exemption for these inadvertent duplicates is
the same as for the original document. Finally, the Lehman Vaughn Index notes one
instance in which portions of a withheld document (bates # 000634-668) are non
responsive, but inadvertently not marked as non-responsive. The Lehman Vaughn Index
reflects our final determination of non-responsiveness with respect to this document.
15
THE VAUGHN INDEX DOCUMENTS
Exemption 4 - Documents Purchased or Obtained Voluntarily from Third
Party Providers under Confidentiality Agreements
27. Among the documents identified in the searches described in paragraphs 15-26 above are
copyrighted research reports or analyses purchased by Board or Federal Reserve Bank
("FRB") staff from third party providers such as Moody's Investor Service, Merrill
Lynch, Citigroup Global Markets Equity Research, Morgan Stanley Research and RBC
Capital Markets under contracts or license agreements that require Board and FRB staff
to maintain their confidentiality. These confidential research reports and analyses are
identified on the AI G Vaughn Index as document numbers 000034-39, 40-42, 151-161,
191-2001,276-285,949-954,995-1003, 1004-1009, 1010-1018, 1047-1052, 1104-1108,
1109. In addition, two copyrighted research reports are indentified on the Lehman
Vaughn Index as document numbers 406-07 and 408-414. Finally, document 1086-1093
on the AIG Vaughn Index contains data regarding the U.S. commercial paper market that
the Board obtained on a voluntary basis from Depository Trust & Clearing Corp. (DTCC)
on the understanding that it would be kept confidential. I reviewed these documents in
conducting the searches described in paragraphs 15-26 above and am familiar with their
contents. I have reviewed many similar research reports, analyses and data in conducting
other FOIA searches. Each of these documents contains research and analysis regarding
AIG's or Lehman Brothers' assets, income, earnings, cashflow, revenue and related
topics, or data regarding the U.S. commercial paper market. Accordingly, I concluded
that each of these documents is commercial or financial in nature, within the meaning of
FOIA Exemption 4, and that the third party providers described above are persons under
Exemption 4. The Board and the FRBs voluntarily entered into contracts, license
16
agreements or other agreements with each of these third party providers to provide
research, analysis or data requested by Board or FRB staff, usually in exchange for a fee.
These third party providers will provide similar research, analysis and data to other
clients for a fee, and no U.S. law or regulation requires them to provide this information
to the Board or FRBs. The terms of the Board's and FRBs' contracts, license
agreements, or other agreements with each of these entities requires that the Board or
FRB maintain confidentiality of these research reports, analyses, or data and forbid
further dissemination or publication ofthese reports by Board or FRB staff. In many
cases, these contractual agreements not to disclose appear on the face ofthe research
report. For example, the Moody's Investor Service report listed as document 000034-39
of the AIG Vaughn Index provides "none of such information may be copied or otherwise
reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or
resold, or stored for subsequent use for any such purpose, in whole or in part, in any form
or manner or by any means whatsoever, by any person without Moody's prior written
consent." The Merrill Lynch report listed as document 000152-161 on the AIG Vaughn
Index provides "[r]eceipt and review of this research report constitutes your agreement
not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion or
information contained in this report (including any investment recommendations,
estimates or price targets) prior to Merrill Lynch's public disclosure of such
information." The Citigroup Global Markets Equity Research report listed as document
000995-1003 on the AIG Vaughn Index provides "[a]ny unauthorized use, duplication,
redistribution or disclosure is prohibited by law and will result in prosecution." As a
result of these and similar contractual clauses, and the fact that subscribers must pay a fee
17
for these reports, I concluded that these third party providers do not customarily disclose
the information in these reports to the public. In addition, I am aware through
discussions with high level Board staff members who obtained this data from DTCC that
DTCC does not customarily disclose to the public data on the U.S. commercial paper
market that it provided to the Board. In the alternative, because the Board and FRBs
agree to maintain confidentiality when entering contracts with third party providers,
because third party providers are not required by law or regulation to enter into contracts
or license agreements with the Board or FRBs, and because clients would be less willing
to pay fees for these research reports if they are routinely disseminated to the public
through FOIA or otherwise, it is my view that public disclosure of these reports or data in
connection with these FOIA Requests is likely to make third party providers less willing
to enter contracts and license agreements to provide similar information to the Board and
FRBs, thereby diminishing the Board's and FRBs' ability to obtain similar, necessary
information in the future. Accordingly, I concluded that this information was exempt
from disclosure under FOIA Exemption 4.
Exemption 4 - Information Voluntarily Provided by Foreign Central Banks and Foreign
Bank Supervisors and Confidential Market Sources
28. Documents numbered 000726, 756-757, 1012, 1081-82, 1117, and 1172 on the Lehman
Vaughn Index, and documents 000648-650, 653, and 1084 on the AIG Vaughn Index, are
emails among Board staff and Board members discussing information provided to the
Board on a voluntary basis by foreign central banks, foreign bank supervisors and foreign
exchange trading platforms regarding Lehman Brothers and AIG. I reviewed these
documents in conducting the FOIA searches described in paragraphs 15-26 above, and
have reviewed many similar documents in connection with my duties described in
18
paragraphs 1 From my review of these documents, it appeared to me that the subject
matter was commercial and financial in nature, relating to AIG's and Lehman's financial
condition in countries abroad, or the implications of a potential Lehman or AIG
bankruptcy on markets overseas For example, emails 000726 and 000756-757 on the
Lehman Vaughn Index are emails among SEC and Board staff discussing information
provided by UK bank supervisors regarding outflows of balances and liquidity impacts at
Lehman's overseas affiliates. Email 001012 on the Lehman Vaughn Index, among a
number of Board members and Board staff members, discusses a call in which foreign
bank supervisors provided the Board with information regarding exposures of Lehman's
major foreign subsidiaries. Email 001084 on the AIG Vaughn Index, marked
"confidential" on the subject line and sent the day of the AIG Loan, conveys information
from EBS regarding AIG's ability to trade foreign exchange on that UK-based foreign
exchange trading platform. From my experience in FOIA matters, I am aware that
foreign central banks, foreign bank supervisory agencies, foreign government officials,
and other foreign entities are considered to be "persons" under FOIA. Finally, through
my duties in connection with FOIA matters and my resultant discussions with Board
members and staff who receive information from foreign bank supervisors, foreign
central banks, foreign government officials, and other foreign entities, I am aware that
these persons voluntarily provide information to the Board regarding the condition of
entities such as AIG and Lehman, that no U.S. law or regulation requires them to provide
this information, and that these persons provide this sensitive information to the Board on
the understanding that it will be kept confidential, and that these persons do not
customarily release this information to the public. For example, I considered the fact that
19
email 001084 on the AIG Vaughn Index was marked "confidential," even though it was
only circulated internally at the Board. Moreover, in light of the sensitivity of this
information and these persons' understanding that the information will be kept
confidential, it is my opinion that these persons would be much less willing to provide
similar, sensitive information to the Board in the future if it was publicly disclosed. As a
result, I concluded that this information was exempt under Exemption 4.
29. Documents numbered 000638,675,677,847,867-868,874-875,876-877 and 907 on the
AIG Vaughn Index are e-mails from confidential sources in the private sector to Board
members and staff providing real-time commercial and financial information regarding
AIG. The information provided by these market sources, on the understanding that their
identities would be kept confidential, assisted the Board and staff in determining the
magnitude of AIG's liquidity problems and possible market effects of an AIG
bankruptcy. While the information they provided has been disclosed to the plaintiff,
information identifying these sources has been redacted from the emails under
Exemptions 4 and 6. Through my duties under FOIA, I am aware that the identity of a
trade source is considered commercial or financial under Exemption 4 where the source's
commercial or financial interests could be harmed through disclosure of the fact that they
provided information (market intelligence) regarding a client, competitor or market
conditions to the government. In the case of the emails above, I concluded that the
commercial or financial interests of the market sources could be harmed because of
possible negative reaction of their clients or entities with whom they do business, and that
their identities were commercial or financial in nature. For example, in email 000677, a
confidential source reported "[l]iquidity was poor, [t]hink investor parking in Tbills and
20
Treasuries, we only saw halfthe normal flows." In email 00874-875, a confidential
source reported "The EFT market is being shut down by the AIG problems. The US
senior bank debt market is collapsing due to the collapse in recovery rate assumptions as
more failures are considered." Clients, competitors, or entities that do business with
these sources might react negatively to their provision of this information to the Board,
causing harm to their commercial interests. From my experience with FOIA matters, I
am aware that these private sector individuals and entities are "persons" under FOIA.
Through my duties under FOIA and resultant discussions with Board members and staff
who receive this type of information, I am aware that these confidential market sources
voluntarily provide market intelligence to Board staff under the understanding that their
identities will be kept confidential, that no U.S. law or regulation requires them to
provide this information, and that these persons do not customarily disclose to the public
the fact that they have provided market intelligence to the Board. As a result, it is also
my opinion that disclosure of the identities of these market sources will diminish the
Board's ability to obtain similar information from market sources in the future.
Exemption 5 - Documents that are Pre-Decisional and
Deliberative and Protected by Attorney-Client Privilege
30. Documents numbered 000071, 135,625,857,858,965 and 967 on the AIG Vaughn
Index are e-mails to or from the Board's General Counsel, Scott Alvarez, and Board
members, Board staff members, or staff of the FRBNY, requesting or giving legal advice
relating to AIG. Document 000071 is an e-mail in which Chairman Bernanke requests
legal advice regarding a call to foreign central banks, and the General Counsel responds
with legal advice. Document 000135 is an e-mail from the General Counsel to Governor
Kohn, with copies to Chairman Bernanke, Governor Warsh, FRBNY President Geithner,
21
and a Board staff member, discussing legal issues raised by an AIG plan to improve its
liquidity position. Document 000625 is an e-mail from the General Counsel to a Board
staff member suggesting an edit to a memorandum regarding AIG and providing the
underlying legal reasoning. Document 000855 is an e-mail from a Board staff member to
another Board staff member, with copies to Board members and the General Counsel,
requesting legal advice. Document 000857 is an e-mail from a Board staff member
responding to document 000855 and recounting legal advice he had just received by
telephone from the General Counsel. Document 000858 is an e-mail from the Board's
General Counsel to a Board staff member responding to the request for legal advice in
document 855 above. Document 000965 is an e-mail from the General Counsel to
FRBNY President Geithner and FRBNY General Counsel Thomas Baxter suggesting a
change to a draft AIG resolution (document 000964). Document 000967 is an email
from the Board's General Counsel to the FRBNY's General Counsel making a legal
recommendation as a follow-up to document 000965 above. Because the FRBNY was
acting as a consultant to the Board with regard to the Board's decision to authorize a loan
to AIG, I considered both FRBNY president Geithner and the FRBNY's General Counsel
to be within the attorney-client relationship with regard to these documents. Because
these documents contain candid opinions and legal assessments that were part of the
ongoing process of deliberation leading up to the Board's decision to authorize the
FRBNY to make a loan to AIG, and sought and provided legal advice, I concluded that
they were both pre-decisional and deliberative and protected by the attorney client
privilege and were exempt under FOIA Exemption 5.
22
31. Documents 000906, 941-943,957-959 and 964 on the AIG Vaughn Index are drafts ofa
resolution for the Board regarding AIG and a draft memo for the Board regarding the
legal authority to make an advance to a borrower under section 13(3) ofthe Federal
Reserve Act. These drafts were prepared for the Board, and circulated among, its
attorneys: General Counsel, Scott Alvarez; Deputy General Counsel Rich Ashton, and
Board Legal Division Attorneys Mark VanDerWeide, Sophia Allison, Kieran Fallon and
Stephanie Martin to assist the Board and provide legal advice in advance of its decision
whether to authorize the FRBNY to extend credit to AIG. I concluded that these drafts
were both pre-decisional and deliberative and protected by the attorney-client privilege
and were exempt from disclosure under Exemption 5.
32. Document number 000039 on the Lehman Vaughn Index is a September 13, 2008 e-mail
from Board General Counsel Scott Alvarez to a Board staff member providing legal
analysis on the Treasury's preliminary contingency plans regarding Lehman Brothers and
requesting the staff member's input. Because this communication contained the candid
give and take between the Board's General Counsel and a Board staff member that
formed a part ofthe Board's decision making process, and sought input and provided
legal analysis within the attorney-client relationship, I concluded that it was both pre-
decisional and deliberative and protected by the attorney client privilege and was exempt
from disclosure under Exemption 5.
Exemption 5 -Portions ofthe Board's Internal Contingency
Survival Binder and Procedures for Convening an Emergency PRC Call
33. Document 000634-668 on the Lehman Vaughn Index is the Board's internal contingency
survival binder. The binder summarizes actions Board and FRB staff could take to
safeguard our Nation's financial system in response to a variety of crisis scenarios such
23
as a terrorist attack or stock market crash. As noted on the Lehman Vaughn Index, in
assisting in preparation of the Lehman Vaughn Index, I determined that only those
portions of the manual (bates numbered 000649-650 and 665-668) relating to sudden
insolvency of a major non-financial institution (that is, a non-Board or -banking agency
regulated institution) such as Lehman Brothers are responsive to plaintiff's request for
communications regarding what "contagion" or "systemic effect on financial markets"
may have flowed from a Lehman Brothers bankruptcy. Responsive portions of the
document list steps which could be taken, as well as a suggested timeline of actions and
individuals to be contacted, in the event of such a crisis. By its nature, the binder is
designed to assist staff in rapidly responding to various crisis scenarios that have not yet
occurred. The binder was attached to a September 11, 2008 interagency e-mail (bates
numbered 000633) among members ofFRBNY staff and SEC staff who were assisting
the Board in responding to Lehman's capital and liquidity crisis. The email noted that the
binder and another attachment provided "(g]ood stuff to think about." Because FRBNY
and SEC staff considered the binder as part of the process of advising Board and Board
staff members on possible responses to the Lehman crisis, I considered it to be both
predecisional and deliberative and exempt from disclosure under FOIA Exemption 5.
34. Email 000959, and attachments 000960, 961-976 and 977-982, on the Lehman Vaughn
Index, discuss procedures put in place by the Board and FRBNY to invoke an emergency
conference call of the Payments Risk Committee (PRC) in response to a major disruption
of U.S. payment and settlement operations. The PRC is composed ofrepresentatives of
private sector financial institutions and organizations that participate in U.S. payment and
settlement systems as well as Board and FRB staff members. Email 000959, dated
24
September 12,2008, is an intra-agency communication sent by an FRBNY staff member
to various Board and FRBNY staff members assisting the Board in responding to a
possible Lehman bankruptcy filing. A portion of the email provided to the plaintiff states
that the attachments are being circulated so that "we [can] be prepared in case we want to
invoke the PRe conference call arrangement." Attachment 000960 is a customized, draft
email which could be sent to PRe members "ifthere is a bankruptcy event," according to
the cover email. Attachment 000961-976 is the Board and FRBNY's comprehensive
guide to a PRe emergency conference call which outlines steps that could be taken by
PRe members in the event of a threat to, or disruption of, the U.S. payment and
settlement system, as well as a timetable for action, individuals designated to take various
steps, and contact information for those individuals. Attachment 000977-982 contains a
more generic script "that could be adapted to the situation at hand," as stated in the cover
email, as well as call-in numbers and contact information for key payments people at
PRe banks and institutions. Because Board and FRBNY staff considered the email and
attachments as part of the process of deliberation regarding potential responses to a
possible Lehman Brothers bankruptcy, I considered the email and the attachments to be
predecisional and deliberative and exempt from disclosure under FOIA Exemption 5.
I declare under penalty of peIjury that the foregoing is true and correct. Executed in
Washington, D.C. on this 1.. day of June, 2011.
~ ~
Alison M. Thro
25
Exhibit A
~ O l u -:25 \
To:
FOI.Requests@frb.gov
cc:
Subject: FOIA Request
Date: Mar 21, 2010
Name: Vern McKinley
Affiliation:
Category of
Affiliation: Other
Address1: 20745 Ashburn Station Place
Address2:
City, State: Ashburn, VA
Zip: 20147
E-Mail: vern_mckinley@yahoo.com
Country: UNITED STATES
Country Code: 840
PostalCode: 20147
Telephone: 202-646-5172 (work/home not specified)
Fax:
Max. Fee: $200.00
Fee Waiver:
Delivery: Please mail to above address
Request: I am requesting further detail on information contained on page 3 of
the following minutes of the Board of Governors of the Federal Reserve dated
September 16, 2008 regarding American International Group, Inc. (AIG):
http://www.federalreserve.gov/newsevents/press/monetary/monetary20090311al.pdf
The source of the power referenced in the minutes is Section 13(3) of the
Federal Reserve Act. In particular, I am requesting any and all communications
and records concerning or relating to the Board's decision that detail that
failure of AIG was likely to have a
that were already experiencing a level of
as described in the meeting minutes.
Please let me know as soon as possible how to go about this
information.
Exhibit B
BOARD OF 60VERlIORS
OF THE
FEDERAL RESERVE SYSTEM
WASHI1I6TOll. D. C. 20551
ADDRESS OFFICIAL CORRESPOlfDENCE
TO THE BOARD
March 22, 2010
Mr. Vern McKinley
20745 Ashburn Station Place
Ashburn, Virginia 20147
FOIA Request No. F-2010-002S1
Dear Mr. McKinley,
This will acknowledge receipt of your e-mail dated March 21, 2010 and received by the Board
on March 22,2010, in which you request, pursuant to the Freedom ofInformation Act ("FOIA"),
5 U.S.C. 552, records pertaining to communications and records concerning or relating to the
Board's decision that detail that "the disorderly failure of AIG was likely to have a systemic
effect on financial markets that were already experiencing a significant level of fragility" as
described in the September 16, 2008 Board meeting minutes.
In accordance with section 261.17 of the Board's Rules Regarding Availability of Information,
unless a request for a fee waiver is granted, this letter also confirms our assumption that you will
pay all fees incurred in the processing of your request. You agreed to pay fees up to $200.
The Board makes every effort to fulfill requests in a timely manner; however, there may be
delays in fulfilling complex requests or those that require consultation. Please feel free to
contact the Board's FOIA Requester Service Center at (202) 452-3684 to obtain information
about the status of your request.
Very Truly Yours,
~ ~
F%v
Jeanne M. McLaughlin
Manager, Freedom of Information Office
Exhibit C
BOARD OF GOVERNORS
or THE
FE[)ERAL RESERVE SYSTEM
WASHINGTON, O. C:. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 19, 2010
Mr. Vern McKinley
Ashburn, VA 20147
Request No. 2010100251
Dear Mr. McKinley,
On March 22,2010 the Board of Governors (Board) received your request
dated March 21, 2010, pursuant to the Freedom of Information Act (FOIA), 5 U.S.C.
552 for records pertaining to the Board's decision that detail that "the disorderly failure
of AIG was likely to have a systemic effect on financial markets that were already
experiencing a significant level of fragility" as described in the September 16, 2008
Board meeting minutes.
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period
for our response until May 3, 2010, in order to consult with another agency or with two
or more components of the Board having a substantial interest in the determination of
the request.
If a determination can be made before May 3, 2010, we will respond to
you promptly. It is our policy to process FOIA requests as quickly as possible while
ensuring that we disclose the requested information to the fullest extent of the law.
Very Truly Yours,
Exhibit D
BOARD OF GOVERNORS
OF'THE:
WASHINGTON, O. C. cOSSI
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
November 9, 2010
Mr. Vern McKinley
Ashburn, VA 20147
Dear Mr. McKinley:
This is response to your email message dated March 21,2010, and received by the
Board's Freedom ofInformation office on March 22. Pursuant to the Freedom of
Information Act (the "Act"), 5 U.S.C. 552, you request
[fJurther detail on information contained on page 3 of the following
minutes of the Board of Governors of the Federal Reserve dated September
16,2008 regarding American International Group, Inc. (AIG):
http://www.federalreserve.gov/newsevents/press/monetary/monetary20090
311 aI.pdf. The source of the power referenced in the minutes is Section
13(3) of the Federal Reserve Act. In particular, [you request] any and all
communications and records concerning or relating to the Board's decision
that detail that "the disorderly failure of AIG was likely to have a systemic
effect on financial markets that were already experiencing a significant
level of fragility" as described in the meeting minutes.
By letter dated April 19, 2010, the deadline for our response to your request was
extended.
Staff searched Board records and located a large volume of information that is
responsive to your request. Information being released to you shows that staff monitored
the rapid liquidity drain on AIG; gathered intelligence on AIG and its structure,
counterparty exposures, and market risk positioning from public and internal sources and
from discussions with other regulators, including the OTS, the New York State Insurance
Department, and foreign supervisors; evaluated AIG's solvency and liquidity and
collateral valuations, the exposure oflarge fmandal institutions to AIG, and the pros and
cons oflending to AIG; and assessed AIG's participation in the commercial paper
markets and payments and settlements systems, the systemic risk posed by AIG, and the
bankruptcy alternative.
The responsive information includes confidential fmancial information obtained
from regulated fmancial institutions regarding their exposures to AIG; commercial
2
information purchased by the Federal Reserve Bank of New York ("FRBNY") from a
third party provider pursuant to a contract requiring the FRBNY to maintain the
information as confidential; and the identities of and select details provided by
confidential market sources who voluntarily provided nonpublic commercial information
to FRBNY and Board staff. This information will be withheld under exemption 4 of the
Act. 5 U.S.C. 552(b)(4). Additional responsive information consists of analyses,
deliberations, and recommendations of staff from various levels of the Board and
FRBNY regarding the proposed actions to be taken with respect to AIG and the effects
that an AIG bankruptcy would have on various markets and systems. This information
will be withheld under exemption 5 of the Act. 5 U.S.C. 552(b)(5). In some instances,
responsive documents contain personal contact information (telephone numbers and
email addresses) for staff and officials, including Chairman Bemanke. The documents
also include details of the personal lives of staff. The personal information will be
withheld under exemption 6 of the Act. 5 U.S.C. 552(b)(6). Finally, several
documents contain or consist of information obtained by supervisors as part of and
related to their supervision and examination of financial institutions. This information
will be withheld under exemption 8 of the Act. 5 U.S.C. 552(b)(8). All reasonably
segregable nonexempt information will be provided to you. The nature and volume of
exempt information being withheld will be apparent to you from the face of the
documents being provided to you.
Your request for information is granted in part and denied in part for the reasons
set forth above. The releasable information is being provided to you with this letter. If
you believe you have a right to any information being withheld, you may appeal this
determination in accordance with section 261.13(i) of the Board's Rules Regarding
Availability of Information, a copy of which is enclosed for your information.
1
Very truly yours,
Enclosure
1 You are not required to exhaust administrative remedies in this case, but you have the
right to do so.
Exhibit E
Z20fOdG7
::8. vem_mckinley@yahoo.comon03/28/201003:25:58PM ....
, ;;SiP
(
==o:Iiiiifliii'
~
-c::=:>
::Jt
To:
F01.Requests@frb.gov
~
cc:
N
...0
Subject: FOIA Request
-0
::.Jt
~
Date: Mar 28, 2010
en
N
Name: Vern McKinley
Affiliation:
Category of
Affiliation: Other
Address1: 20745 Ashburn Station Place
Address2:
City, State: Ashburn, VA
Zip: 20147
E-Mail: vern mckinley@yahoo.com
Country: UNITED STATES
Country Code: 840
PostalCode: 20147
Telephone: 202-646-5172 (work/home not specified)
Fax:
Max. Fee: $200.00
Fee Waiver:
Deiivery: Please mail to above address
Request: I am requesting any and all communications and records regarding
analysis undertaken regarding Lehman Brothers and the assessment in September
2008 or earlier of what "contagion" might have flowed from Lehman Brother's
filing of bankruptcy as the word contagion was used in the case of the Board
of Governors' deliberations over Bear Stearns:
://www.federalreserve.gov/newsevents/press/other/other20080627al.pdf
or "systemic effect on financial markets" that may have flowed from a Lehman
bankruptcy as the phrase was used in the Board of Governors' deliberations
over American International Group (page 3):
http://www.federalreserve.gov/newsevents/press/monetary/monetary20090311al.pdf
The analysis would likely have been undertaken in the context of considering
whether to take action under Section 13(3) of the Federal Reserve Act to avoid
a Lehman bankruptcy.
Please let me know as soon as possible how to go about receiving this
information.
Exhibit F
BOAlD OF GOVEl.HOlS
OF THE
WASHDlGTOll. D. C. 20551
ADDRESS OFFICIAL COBRESPOlfDENCE
TO TEE BOARD
March 30,2010
Mr. Vern McKinley
FOIA Request No. F-2010-00267
Dear Mr. McKinley,
This will acknowledge receipt of your e-mail dated March 28, 2010 and received by the Board
on March 29,2010, in which you request, pursuant to the Freedom of Information Act C'FOIA"),
5 U.S.C. 552, records pertaining to any and all communications and records regarding analysis
undertaken concerning Lehman Brothers and the assessment in September 2008 or earlier of
what "contagion" might have flowed from Lehman Brother's filing of bankruptcy as the word
contagion was used in the case ofthe Board's deliberations over Bear Stearns or "systemic effect
on financial markets" that may have flowed from a Lehman bankruptcy as the phrase was used in
the Board's deliberations over American International Group.
In accordance with section 261.17 ofthe Board's Rules Regarding Availability of Information,
unless a request for a fee waiver is granted, this letter also confinns our assumption that you will
pay all fees incurred in the processing of your request. You agreed to pay fees up to $200.
The Board makes every effort to fulfill requests in a timely manner; however, there may be
delays in fulfilling complex requests or those that require consultation. Please feel free to
contact the Board's FOIA Requester Service Center at (202) 452-3684 to obtain information
about the status of your request.
Very Truly Yours,
Exhibit G
BOARO OF GOVERNORS
OF THE
WASHINGTON, O. C. o:!DSSI
ADDRESS OFFICIAL CORRESPONOENCE
TO THE aOARe
April 26, 2010
Mr. Vern McKinley
Request No. 2010100267
Dear Mr. McKinley,
On March 29, 2010 the Board of Governors (Board) received your request dated March
28,2010, pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. 552 for records
pertaining to any and all communications and records regarding analysis undertaken regarding
Lehman Brothers and the assessment in September 2008 or earlier of what "contagion" might
have flowed from Lehman Brother's filing of bankruptcy, or "systemic effect on financial
marketsIt that may have flowed from a Lehman bankruptcy.
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response
until May 10, 2010, in order to consult with another agency or with two or more components of
the Board having a substantial interest in the determination of the request.
Ifa determination can be made before May 10,2010, we will respond to you promptly. It
is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the
requested information to the fullest extent ofthe law.
Sincerely,
~ l \ \ ~ 3 ~
Manager
Freedom of Information Office
Exhibit H
.......
BOARD OF GOVERNORS
OF'THE:
WASHINGTON, O. 1:. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November 9, 2010
Mr. Vern McKinley
Ashburn, VA 20147
Dear Mr. McKinley:
This is response to your email message dated March 28,2010, and received by the
Board's Freedom of Information office on March 29. Pursuant to the Freedom of
Information Act (the "Act"), 5 U.S.C. 552, you request a copy of
any and all communications and records regarding analysis undertaken
regarding Lehman Brothers and the assessment in September 2008 or
earlier of what "contagion" might have flowed from Lehman Brother's
filing of bankruptcy as the word contagion was used in the case of the
Board of Governors' deliberations over Bear Stearns ... or "systemic effect
on financial markets" that may have flowed from a Lehman bankruptcy as
the phrase was used in the Board of Governors' deliberations over
American International Group. . . . The analysis would likely have been
undertaken in the context of considering whether to take action under
Section 13(3) of the Federal Reserve Act to avoid a Lehman bankruptcy.
By letter dated April 26, 2010, the deadline for our response to your request was
extended.
Staff searched Board records and located a large volume of infonnation that is
responsive to your request. Infonnation being released to you shows that staff
systematically monitored the potential impact of Lehman's declining financial condition
on the triparty repo, OTC derivatives, and commercial paper markets and large fmancial
institutions in the days preceding Lehman's bankruptcy. Staff also evaluated Lehman's
worldwide participation in exchanges and clearing systems and counterparty exposures
and considered various alternatives to addressing Lehman's situation, including
contingencies in the event of a run on Lehman, a good bank/bad bank solution,
bankruptcy, a private sector liquidation consortium, and a private sector default
management group. Staff also developed detailed plans for communicating with
domestic and international supervisors and central banks.
2
The responsive information includes an internal Board contingency planning guide
that will be withheld under exemptions 2 and 5 ofthe Act, 5 U.S.C. 552(b)(2) &
(b)(5). It also includes confidential financial information obtained from regulated
fmancial institutions regarding their exposure to Lehman; commercial information
purchased by the Federal Reserve Bank ofNew York ("FRBNY") from a third party
provider pursuant to a contract requiring the FRBNY to maintain the information as
confidential; and the identities of and select details provided by confidential market
sources who voluntarily provided nonpublic commercial information to FRBNY and
Board staff. This information will be withheld under exemption 4 of the Act.
5 U.S.C. 552(b)(4). Additional responsive information consists of analyses,
deliberations, and recommendations of staff from various levels of the Board and
FRBNY regarding the proposed actions to be taken with respect to Lehman and the
effects that a Lehman bankruptcy would have on various markets and systems. This
information will be withheld under exemption 5 ofthe Act. 5 U.S.C. 552(b)(5). In
some instances, responsive documents contain personal contact information (telephone
numbers and email addresses) for staff and officials, including Chairman Bemank:e. The
documents also include details of the personal lives of staff. The personal information
will be withheld under exemption 6 of the Act. 5 U.S.C. 552(b)(6). Finally, several
documents contain or consist of information obtained by supervisors as part of and
related to their supervision and examination of fmancial institutions. This information
will be withheld under exemption 8 ofthe Act. 5 U.S.C. 552(b )(8). All reasonably
segregable nonexempt information will be provided to you. The nature and volume of
exempt information being withheld will be apparent to you from the face ofthe
documents being provided to you.
Your request for information is granted in part and denied in part for the reasons
set forth above. If you believe you have a right to any information being withheld, you
may appeal this determination in accordance with section 26 1.13(i) of the Board's Rules
Regarding Availability ofInformation, a copy of which is enclosed for your information.
l
Very truly yours,
Enclosure
1 You are not required to exhaust administrative remedies in this case, but you have the
right to do so.
Exhibit I
Index of Documents Withheld in Response to FOIA Request 2010-251 of Vern McKinley (AIG), dated June 7, 2011
Page 1 of 96
Bates range Description of document Description of Withheld
Material
Exemption Withheld in
Full or
Redacted
number
of pages
000001 September 12, 2008 email from an outside trade
strategist to Patrick Parkinson (Board Director of
Banking Supervision & Regulation), Terrence
Checki (Federal Reserve Bank of New York
Executive Vice President) and Spence Hilton
(Federal Reserve Bank of New York Senior Policy
Advisor), entitled "Our biggest worry here",
regarding worries about AIG credit trading.
Identifying information of
confidential market
sources who provided non-
public commercial or
financial information to
FRBNY or Board staff.
Exemption 4. This document
contains identifying
information of confidential
market sources who
voluntarily provided
commerical or financial
information relating to AIG
to Board or Federal Reserve
Bank of New York (FRBNY)
staff. The identity of these
sources is commercial or
financial information and
these persons would not
customarily disclose to the
public that they had
provided information to
Board or FRBNY staff.
Redacted 1
Page 2 of 96
Material
Full or
Redacted
number
of pages
000001 con't Alternatively, disclosure of
these identities likely would
impair the Board's ability to
obtain necessary information
in the future as confidential
market sources would be
unlikely to provide
information if they knew
their identifying information
would be disclosed.
000005 September 12, 2008 email from an outside analyst
to Chris Burke (FRBNY Vice President of Markets),
William Dudley (FRBNY Executive Vice President of
Markets), and Gustavo Suarez (Board Economist)
entitled, "RE: I am getting a lot of questions from
investors on AIG." The email discusses AIG taking
a hit in the market, most likely due to the Lehman
situation.
confidential market
Exemption 4. See Bates
000001 above.
Redacted 1
000009 September 12, 2008 continuation of email
#000005, above from the outside analyst
regarding AIG taking a hit in the market.
confidential market
000001 above.
Redacted 1
Page 3 of 96
Material
Full or
Redacted
number
of pages
000011-12 September 12,2008 continuation of email
#000009, above from Gustavo Suarez, forwarding
the above email to Board economists, Nellie Liang
and Daniel Covitz with a comment on AIG's
trouble with commercial paper. Further e-mail
from Nellie Liang forwarding to Pat Parkinson and
Brian Madigan.
confidential market
000001 above.
Redacted 2
000018-19 September 12, 2008 email from outside analyst to
Chris Burke, William Dudley, and Gustavo Suarez
entitled, "AIG: Update", reporting that AIG ratings
are on NEG WATCH for downgrade. Further e-
mail from Gustavo Suarez forwarding e-mail to
Chris Burke, William Dudley, and the sender.
confidential market
000001 above.
Redacted 1
Page 4 of 96
Material
Full or
Redacted
number
of pages
000020 September 12, 2008 email chain among Patrick
Parkinson, Deborah Bailey (Deputy Director of
BS&R), Jon Greenlee (Associate Director of BS&R),
Brian Madigan (Director of Monetary Affairs), and
Scott Alvarez (Board General Counsel) which
discusses concerns about the condition of AIG.
Supervisory ratings of an
AIG financial institution
holding company and an
AIG thrift.
Exemption 8. This
document contains financial
institution supervisory
ratings and supervisory
information, contained in or
related to examination,
operating or condition
reports prepared by, on
behalf of, or for the use of an
agency responsible for the
regulation or supervision of
financial institutions. Here,
the supervisory agency is the
Office of Thrift Supervision
(OTS) and the information
was obtained in the course
of its supervision of AIG FSB,
a federally-chartered thrift,
an AIG thrift holding
company and/or an AIG
trust.
Redacted 1
Page 5 of 96
Material
Full or
Redacted
number
of pages
000020 con't The OTS shared this
information with supervisory
staff at the Board, also a
federal financial institution
supervisory agency, and/or a
Federal Reserve Bank (FRB)
as the Board's delegee.
000023 September 12, 2008 email from Lyle Kumasaka
(Monetary Affairs) to Brian Madigan and various
other MA staff, provides financial information
regarding AIG Federal Savings Bank.
AIG FSB's supervisory
rating.
000020 above.
Redacted 1
000030-31 September 12, 2008 email chain between Gustavo
Suarez and Nellie Liang entitled, "I may need some
help AIG." regarding timeframe for working on
AIG.
Personal phone number of
a board staff member is
redacted.
Exemption 6. Disclosure of
staff members' personal
phone numbers, which do
not shed light on
government operations,
would constitute a clearly
unwarranted invasion of
their personal privacy which
outweighs de minimis public
interest in disclosure.
Redacted 2
Page 6 of 96
Material
Full or
Redacted
number
of pages
000034-000039 Moody's Investor Service's August 14, 2008 Credit
Opinion on AIG. The document is attached to a
September 12, 2008 email from William Nelson to
Deborah P Bailey, Brian F Madigan, James A
Clouse (MA Economist), Daniel M Covitz, William
B English, and Gustavo A Suarez entitled, "some
additional info on AIG."
Non-Public Credit Opinion
prepared by Moody's
Investor service regarding
AIG.
contains commercial or
financial information
regarding AIG obtained by
the Board or FRBNY from a
third party provider under a
contract that requires the
Board or FRBNY to maintain
confidentiality. The
information was voluntarily
provided and would not
customarily be disclosed to
the public by the provider.
In the alternative, disclosure
likely would impair the
Board/FRBNY's ability to
obtain similar, necessary
information in the future.
Withheld in
Full
6
000040-000042 Moody's September 11, 2008 Individual Firm
information on AIG. This document is attached to
the same email as #000034-000039, above.
Non-Public Firm Summary
prepared by Moody's
Investor service regarding
AIG.
000034-39 above.
Withheld in
Full
3
Page 7 of 96
Material
Full or
Redacted
number
of pages
000044 September 12, 2008 email from Deborah Bailey to
the Federal Reserve Board of Governors, Scott
Alvarez and Roger Cole (Director of Banking
Supervision and Regulation) entitled, "Fw: AIG
meeting this afternoon." The email discusses AIG's
supervisory ratings.
Supervisory ratings and
supervisory information
regarding an AIG financial
institution holding
company, an AIG thrift, and
an AIG trust are redacted.
Chairman Bernanke's email
address is redacted.
000020 above. In addition,
portions of this document
are withheld under
Exemption 8 because they
discuss information obtained
by OTS in the course of
supervising the AIG-related
financial institutions listed in
Bates 000020 above and
OTS's plans for supervising
those institutions.
the Chairman's unique e-mail
address, which does not
shed light on government
operations, would constitute
a clearly unwarranted
invasion of his personal
privacy, which outweighs de
minimis public interest in
disclosure.
Redacted 1
Page 8 of 96
Material
Full or
Redacted
number
of pages
000056-000059 September 13, 2008 draft memorandum prepared
by William English, a Board officer in Monetary
Affairs (MA), regarding AIG's operations and
difficulties. This document is attached to an email
from William English to Brian Madigan, then the
Director of MA, and copying various other MA
staff entitled, "Background on AIG."
Analysis prepared by a
Board officer in Monetary
Affairs ("MA") and
provided to the Director of
MA regarding AIG's
operations and current
difficulties. The
memorandum was pre-
decisional and prepared to
inform Board staff in
advance of the Board's
decision whether to
authorize the FRBNY to
lend to AIG. AIG's
Consolidated Balance Sheet
is attached, but not
redacted.
is a pre-decisional,
deliberative draft
memorandum from a Board
officer to a more senior
Board officer providing
analysis and expressing
opinions on AIG's operations
and financial difficulties
which was part of the
process leading up to the
Board's decision to authorize
the FRBNY to lend to AIG.
Disclosure of
communications such as this
would have a chilling effect
on intra-agency
communications.
Redacted 4
000066-67 September 12 and 13, 2008 email between Scott
Alvarez and FRBNY staff regarding AIG contact
information.
Personal cell phone
number.
000030-31 above.
Redacted 2
Page 9 of 96
Material
Full or
Redacted
number
of pages
000068 September 13, 2008 email from Brian Madigan to
Chairman Bernanke, briefing Bernanke on AIG's
loan request.
address.
shed light on the operations
of the government, would
constitute a clearly
unwarranted invasion of his
personal privacy, which
Redacted 1
000071 September 13, 2008 email chain between
Chairman Bernanke, Scott Alvarez, Brian Madigan
and Patrick Parkinson. The chain discusses calls to
brief foreign central banks and foreign supervisors
on the AIG situation.
Internal communications
regarding the calls and
address.
contains a confidential
communicaion from
Chairman Bernanke to the
Board's General Counsel,
Scott Alvarez, requesting
legal advice, and the General
Counsel's response, which is
predecisional and
deliberative and protected
by the attorney-client
privilege.
000068 above.
Redacted 1
Page 10 of 96
Material
Full or
Redacted
number
of pages
000072 September 13, 2008 email from Board Governor
Donald Kohn to FRBNY President Geithner and
Board Governor Kevin Warsh and copying
Chairman Bernanke, reporting on a discussion
with AIG and deliberating on possible strategies.
Internal deliberations
regarding strategies for AIG
and Chairman Bernanke's
email address.
Exemption 5. This e-mail
contains internal, pre-
decisional discussions among
Board members and the
President of the FRBNY, in
the FRBNY's role as a
consultant to the Board,
requesting views and
providing opinions regarding
possible courses of action to
take in response to AIG's
request for a loan.
Disclosure of
on intra-agency
communications.
000068 above.
Redacted 1
#000072, above from Chairman Bernanke
assessing AIG's condition, causes of the problems
and potential solutions.
email address.
000072 above.
000068 above.
Withheld in
Full
1
Page 11 of 96
Material
Full or
Redacted
number
of pages
#000078, above from Governor Kohn to Chairman
Bernanke, deliberating on causes of the problems
and potential solutions for AIG.
email address.
members of the Board
expressing opinions and
weighing options regarding
possible courses of action to
take in response to AIG's
request for a loan.
Disclosure of
on intra-agency
communications.
000068 above.
Withheld in
Full
1
#000083, above from Chairman Bernanke to
Governor Kohn, thanking Kohn for his previous
email.
address.
000068 above.
Redacted 1
Page 12 of 96
Material
Full or
Redacted
number
of pages
000087-000090 September 13, 2008 draft of a Board staff
memorandum entitled "Issues Related to the
Difficulties at American International Group." The
memorandum provides background information
on AIG's operations, the sources of its current
difficulties, an assessment of its liquidity and
solvency, a discussion of the possible costs and
benefits of IPC lending to the firm, and a staff
recommendation regarding such lending. This
document is attached to a September 13, 2008
email from William English to Michael Gibson
(Research & Statistics Economist), inviting
comments on the draft.
Board staff analyses and
recommendations
regarding AIG.
Exemption 5. Pre-decisional
draft of a Board staff
memorandum to Board
members and/or more
senior Board staff members
providing analysis of AIG's
operations, current
difficulties, liquidity,
solvency, and related issues,
and discussing possible risks
and benefits of loan to AIG,
to assist the Board in
deciding whether to
authorize a loan to AIG.
Disclosure of
on intra-agency
communications.
Withheld in
Full
4
000091 September 13, 2008 email from Tobias Adrian
(FRBNY Economist) to Michael Gibson and copying
FRBNY economists, Adam Ashcraft and
Christopher Calabria. Adrian is updating Gibson
on AIG work assignments in progress.
Personal cell phone
number.
000030-31 above.
Redacted 1
Page 13 of 96
Material
Full or
Redacted
number
of pages
000092-000093 September 13, 2008 email from Adam Ashcraft to
FRBNY staff and Michael Gibson entitled, "AIG
solvency." The email lists key documents and
information used in determining AIG's solvency.
Internal economic analysis
and personal cell phone
number.
members of Board staff and
FRBNY staff, in the FRBNY's
role as a consultant to the
Board, requesting views,
exchanging opinions, and/or
gathering information
regarding AIG's solvency,
effects of an AIG bankruptcy
on regulated financial
institutions, the Board's and
AIG's options, and related
issues as part of the Board's
ongoing decision-making
process in responding to
AIG's request for a loan.
Withheld in
Full
2
Page 14 of 96
Material
Full or
Redacted
number
of pages
000092-93 con't Discussions in later
documents may include
staffs of other FRBs, in their
role as consultants to the
Board, as is apparent from
the face of the document.
Disclosure of
on intra-agency
communications.
000030-31 above.
000094 September 13, 2008 email from Adam Ashcraft to
Tobias Adrian and copying Christopher Calabria
and Michael Gibson. The email informs Adrian
that Ashcraft is working on the solvency question
and that Markets has the collateral issue in
control.
Personal cell phone
number.
000030-31 above.
Redacted 1
Page 15 of 96
Material
Full or
Redacted
number
of pages
000096-000097 September 13, 2008 email from Patricia Mosser
(FRBNY Chief Marketing Officer) to various Board
and FRBNY staff entitled, "AIG/Board call." The
email summarizes a morning call between AIG and
the Board of Governors.
Commercially sensitive
information regarding AIG's
financial situation and
internal analysis.
contains confidential
commercial or financial
information provided
voluntarily by AIG to the
Board and/or FRBNY
regarding its financial
condition, steps it was taking
to remain solvent, and
related information. AIG
voluntarily provided this
information to the
Board/FRBNY in the course
of discussions regarding a
possible loan and would not
customarily disclose it to the
public.
000092-93 above.
Redacted 2
#000092-000093, above from Michael Gibson,
commenting on and asking questions about the
discussion in the email #000092-000093.
Internal economic analysis. Exemption 5. See Bates
000092-93 above.
Withheld in
Full
1
Page 16 of 96
Material
Full or
Redacted
number
of pages
000099 September 13, 2008 email from Brandon Hall
(FRBNY Financial Analyst) to a BS&R email group,
providing LCBO credit exposures to AIG.
AIG credit exposures of
several Board-regulated
financial institutions.
information obtained by
Board and/or FRB
supervisory staff from
regulated financial
institution(s) regarding their
credit or other exposure to
AIG, exposure to other
institutions, and related
financial information.
Provision of this information
was mandatory. Disclosure
is likely to cause substantial
competitive injury to
financial institution(s) or
information in the future by
diminishing the quality or
reliability of information
provided.
Redacted 1
Page 17 of 96
Material
Full or
Redacted
number
of pages
000099 con't Exemption 8. This document
contains information
obtained by FRB and/or
Board supervisory staff from
supervised large complex
banking organizations
(LCBOs) (also referred to as
large financial institutions
(LFIs)) regarding the LCBOs'
credit and other exposure to
AIG in order to assess the
risk to the LCBOs of a
possible AIG bankruptcy.
This information is contained
in or related to examination,
000100 Spreadsheet headed, "LFI Key Credit Exposures to
AIG (USD and EUR Millions)" is an attachment to
email #000100, above
000099 above.
000099 above
Withheld in
Full
1
Page 18 of 96
Material
Full or
Redacted
number
of pages
000102 1-page draft memorandum regarding AIG funding
and liquidity needs. This document is an
attachment to a September 13, 2008 email from
Jon Greenlee to Michael Gibson and Christopher
Calabria entitled, "Rough cut at a liquidity
section."
Draft memorandum. Exemption 5. See Bates
000087-90 above. This draft
focuses on AIG's funding and
liquidity needs.
Withheld in
Full
1
#000092-000093, above from Warren Hrung
adding his economic analysis regarding AIG
solvency.
Internal economic analysis. Exemption 5. See Bates
000092-93 above.
Redacted 1
#000098, above from Adam Ashcraft adding his
economic analysis regarding AIG solvency.
Internal economic analysis Exemption 5. See Bates
000092-93 above.
Withheld in
Full
1
000109-000110 2-page memorandum entitled "AIG derivatives"
describes AIG's derivative book, discusses possible
market disruption from a close-out, and requests
assistance from other staff members filling in
details of the draft. This document is attached to
a September 13, 2008 email from Michael Gibson
to various Board and FRBNY staff requesting
assistance on the details.
Draft Board staff analyses
regarding AIG derivatives.
focuses on AIG's derivative
book and analyses possible
market disruption from a
close out.
Withheld in
Full
2
000112 DUPLICATE of #000066-000067 inadvertently not
marked as a duplicate.
Exemption 6. Redacted 1
Page 19 of 96
Material
Full or
Redacted
number
of pages
000115-000116 September 13, 2008 email chain between BS&R
staff entitled, "Urgent conference call." scheduling
a call to discuss developments in the marketplace.
Internal deliberations. Exemption 5. This e-mail
members of Board staff
expressing opinions and/or
providing analysis regarding
options available to the
Board or AIG, or
consequences of various
courses of action, as part of
the Board's overall decision-
making process regarding
whether to authorize a loan
to AIG. Disclosure of
on intra-agency
communications.
Redacted 2
000121 September 13, 2008 email from Governor Kohn to
Governor Kroszner speculating on AIG and
discussing other regulators.
Market sensitive
information about AIG's
strategy and internal
deliberations.
Exemption 4. The Board will
not assert Exemption 4 for
this document.
000083 above.
Redacted 1
Page 20 of 96
Material
Full or
Redacted
number
of pages
Chairman Bernanke, FRBNY President Geithner,
Governor Warsh, Scott Alvarez and Brian Madigan
summarizing a conversation with AIG regarding
ways to improve their financial condition.
Sensitive information
regarding AIG's strategy
and internal deliberations
and Chairman Bernanke's e-
mail address.
000072 above. The Board's
General Counsel and a senior
Board officer are copied on
this e-mail.
000068 above.
Redacted 1
#000127, above from Chairman Bernanke
commenting on the conversation with AIG.
address.
000068 above.
Redacted 1
000130-000134 2-page memorandum entitled, "AIG Financial
System Risk Evaluation," which provides potential
responses to AIG's situation. This document is
attached to a September 13, 2008 email from
Tobias Adrian to Michael Gibson, Adam Ashcraft,
Christopher Calabia and copying Joshua
Rosenberg.
Internal document with
economic analysis.
Exemption 5. Pre-decisional
memo from FRBNY staff, in
its role as a consultant to the
Board, to Board staff or
Board members presenting
analysis or opinion regarding
possible risks and benefits of
a loan to AIG or options
available to the Board or
AIG, as part of the Board's
overall process of deciding
whether to authorize the
FRBNY to extend credit to
AIG. Disclosure of
on intra-agency
communications.
Withheld in
Full
5
Page 21 of 96
Material
Full or
Redacted
number
of pages
#000127, above from Scott Alvarez regarding
AIG's plan for improving its financial condition.
Alvarez provides his analysis of AIG's options.
Internal deliberations,
attorney opinion, and
address.
00072 and Bates 000071
above. This document is
both pre-decisional and
attorney-client privileged.
000068 above.
Withheld in
Full
1
000136 September 13, 2008 email from William Nelson to
Roberto Perli (MA) entitled, "consequences,"
asking about the systemic risk of AIG.
Internal deliberations. Exemption 5. See Bates
000115-116 above.
Withheld in
Full
1
William English and James Clouse discussing the
systemic risk of AIG.
000115-116 above.
Withheld in
Full
1
Brian Madigan commenting on and asking
questions about improving the condition of AIG.
000115-116 above.
Withheld in
Full
1
000140 September 13, 2008 email from William English to
various Board staff members entitled "Partial
memo draft." The email describes the 2 attached
documents (#000141-000146 and releasable pgs.
147-150) and invites comments.
Internal deliberations and
plans.
000115-116 above.
Redacted 1
Page 22 of 96
Material
Full or
Redacted
number
of pages
memorandum entitled "Issues Related to Possible
Lending to American International Group." The
solvency, and a discussion of the possible costs
and benefits of IPC lending to the firm. This
document, attached to email #000140, above, is a
later draft of the memorandum identified as item
#000087-000090 above.
Draft document - Board
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
6
000152-000161 Merrill Lynch's August 18, 2008 financial
assessment of AIG entitled, "Standard & Poor's on
AIG." This document is attached to an email from
William Hrung to various Board and FRBNY staff in
order to provide insight into S&P's thinking.
Non-Public financial
assessment prepared by
Merrill Lynch regarding
AIG.
000034-39 above.
Withheld in
Full
10
000162 September 13, 2008 email from Warren Hrung to
Michael Gibson, providing comments and
questions regarding AIG's credit default swap
exposures.
000092-93 above.
Redacted 1
#000162, above from Michael Gibson regarding
AIG credit default swap exposures.
Internal deliberations Exemption 5. See Bates
000092-93 above.
Redacted 1
000166 September 13, 2008 email from Michael Gibson to
Patrick Parkinson regarding the systemic risk of
AIG's OTC derivatives.
000115-116 above.
Withheld in
Full
1
Page 23 of 96
Material
Full or
Redacted
number
of pages
000169-000170 September 13, 2008 email chain between Board
staff and FRBNY staff entitled, "AIG update." The
email provides an update on FRBNY conversations
with AIG and the NY State Insurance Dept
regarding improving AIG's financial condition.
inter-agency deliberations
and information obtained
by the New York State
Insurance Department
(NYSID) in the course of its
regulation of AIG.
000096-97 above.
000092-93 above.
obtained by the NYSID,
which is responsible for
supervising and regulating
insurance businesses in New
York State, in the course of
NYSID's supervision and
regulation of AIG's NY State
insurance companies, which
are financial institutions.
Redacted 2
000169-170
con't
Page 24 of 96
Material
Full or
Redacted
number
of pages
#000140, above from William Nelson regarding
AIG memos. This email describes edits made to
the AIG memo attached.
000115-116 above.
Redacted 1
attachment to email #000171, above, is a later
draft of the memo identified as #000141-000146.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
9
Page 25 of 96
Material
Full or
Redacted
number
of pages
Michael Gibson to William English, Brian Madigan,
James Clouse, Jon Greenlee, and Roberto Perli, is
a later draft of the memo identified as #000172-
000180, above and includes edits from Michael
Gibson.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
8
000192-000201 AIG Corporate Structure provided by SNL Financial
LC. This document is an attachment to a
September 13, 2008 email from Diane Fraser
(Board Financial Analyst) to Jon Greenlee and
Sabeth Siddique (BS&R) entitled, "AIG Org. w/
assets + other info in advance of call w/ NY State
Insurance Dept. tomorrow a.m."
Non-public corporate
structure information
prepared by SNL Financial
re AIG.
000034-39 above.
Withheld in
Full
10
#000139, above between William Nelson and
Brian Madigan regarding improving the condition
of AIG.
000115-116 above.
Withheld in
Full
1
000250-000251 DUPLICATE of #000109-000110 inadvertently not
Exemption 5. Withheld in
Full
2
Page 26 of 96
Material
Full or
Redacted
number
of pages
Brian Madigan to Michael Gibson and copying
other MA staff, is a later draft of the memo
identified as item #000182-000189 above and
includes comments from Brian Madigan.
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
8
000261 September 14, 2008 email from Jon Greenlee to
Brian Madigan and other MA staff discussing the
AIG issue in terms of history and the insurance
industry.
000115-116 above.
Withheld in
Full
1
000262-000263 September 14, 2008 email from Adam Ashcraft to
various FRBNY staff commenting on AIG
strategies.
000092-93 above.
Redacted 2
000264-000265 Memorandum attached to email identified as
#000262-000263, above entitled, "Comment on
possible 13-3 lending to AIG."
000130-134 above.
Withheld in
Full
2
Page 27 of 96
Material
Full or
Redacted
number
of pages
000266-000275 Merrill Lynch's August 18, 2008 financial
assessment of AIG entitled, "Standard & Poor's on
AIG" attached to an email identified as #000262-
000263, above regarding AIG strategies. Duplicate
of 000152-161 above, inadvertently not marked
"duplicate."
Non-Public financial
assessment prepared by
Merrill Lynch regarding
AIG.
Full
10
000276-000285 Merrill Lynch's September 12, 2008 report
assessing financial condition of AIG, attached to
email #000264-000265, above.
Non-Public assessment of
AIG's financial condition
prepared by Merrill Lynch.
000034-39 above.
Withheld in
Full
10
#000261, above discussing the AIG issue in terms
of history and the insurance industry. In this
email, Brian Madigan provides comments and
questions on AIG's condition.
000115-116 above.
Redacted 1
000289 September 14, 2008 email from Patricia Mosser to
various Board and FRBNY staff regarding the
agenda for a conference call with NYSID on AIG.
Agenda for inter-agency
meeting.
000092-93 above.
Redacted 1
000292 September 14, 2008 continuation of the email
identified as # 000262-000263, above,
commenting on AIG strategies. In this email,
Michael Gibson discusses a previous call with AIG
and asks questions about potential strategies.
000092-93 above.
Withheld in
Full
1
000294 September 14, 2008 meeting invitation to various
Board and FRBNY staff for a conference call with
NYSID on AIG.
Agenda for inter-agency
meeting.
000092-93 above.
Redacted 1
Page 28 of 96
Material
Full or
Redacted
number
of pages
000300 September 14, 2008 continuation of email #
000292-000293, above, commenting on AIG
strategies. In this email, Adam Ashcraft relays
internal information.
000092-93 above.
Redacted 1
MA staff with a portion of a draft memo dealing
with AIG's capital condition.
Draft of internal memo. Exemption 5. See Bates
000087-90 above.
Redacted 1
000303-000304 September 14, 2008 email exchange between
Board staff and FRBNY staff asking questions
about and commenting on a call with AIG about
strategies to improve their financial condition.
000092-93 above.
Redacted 2
William Nelson to William English is a later draft of
the memo identified as item #000253-000260,
above.
staff analyses and
recommendations
regarding AIG.
00087-90 above.
Withheld in
Full
12
Page 29 of 96
Material
Full or
Redacted
number
of pages
000318 September 14, 2008 email from Jon Greenlee to
Deborah Bailey and Roger Cole summarizing a call
with the NYSID on the condition of AIG and
strategies for improving AIG's condition.
NYSID supervisory
information regarding AIG.
000115-116 above.
this document.
Redacted 1
recommendation regarding such lending. The
consolidated balance sheet and income statement
are provided. This attachment to a September 14,
2008 email from William Nelson to Michael
Gibson and Roberto Perli, is a later draft of the
memo identified as item #000253-000260 above
and includes comments from Michael Gibson.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
11
Page 30 of 96
Material
Full or
Redacted
number
of pages
William Nelson to Michael Gibson and Roberto
Perli, is a later draft of document #000321-
000331, above and includes comments from
Michael Gibson.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
11
Page 31 of 96
Material
Full or
Redacted
number
of pages
Roberto Perli to William Nelson and copying
Michael Gibson and William English, is a later draft
of the memo identified as item #000336-000346,
above and includes comments from Roberto Perli.
recommendations
regarding AIG.
Exemption 5 Withheld in
Full
11
000360 DUPLICATE of #000140 and #000261 but
inadvertently not marked duplicate.
plans.
Exemption 5
Page 32 of 96
Material
Full or
Redacted
number
of pages
recommendation regarding such lending. This is a
later draft of the memo identified as item
#000348-000358, above and includes edits from
Diane Fraser.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
8
000369-000371 DUPLICATE of #000140 and #000261 but
plans.
Exemption 5 Redacted 3
000375 September 13, 2008 meeting notes from an
LFIT/RSO Discussion on Market Events and Issues
marked "Restricted F.R." This document is
Stacy O'Bryant (Federal Reserve Bank of
Richmond) to various Federal Reserve System
staff entitled, "Draft LFI Conference Call Notes -
9/13/08 7pm call - Revised Version."
Business sensitive
information regarding AIG's
liquidity and strategies for
improving and internal
discussion regarding
systemic risk of AIG.
000096-97 above and Bates
000099 above (this
document contains both
types of information).
000092-93 above.
Redacted 1
000377-000378 September 14, 2008 email between FRBNY staff,
forwarded to Brian Madigan of the Board's staff,
summarizing a call with insurance regulators on
liquidity plans for AIG.
Business sensitive and
regarding AIG's condition
and internal deliberations
regarding strategies for
improving AIG.
000096-97 above.
000092-93 above.
000169-170 above.
Redacted 2
Page 33 of 96
Material
Full or
Redacted
number
of pages
000379-000380 2-page memorandum sent from Alejandro LaTorre
(FRBNY) to Brian Madigan on September 14, 2008
entitled, "Pros and Cons of Lending to AIG." This
document is attached to a September 14, 2008
email from Alejandro LaToree to Brian Madigan
entitled, "Liquidity Plans from AIG - Call with
Insurance Regulators @ 10:30 today."
regarding lending to AIG.
000130-134 above.
Withheld in
Full
2
000383 Spreadsheet entitled, "Selected Affiliated
Members of Payments and Settlement Systems."
This document is attached to a September 14,
2008 email from Melissa Vanlandingham (Board
Financial Analyst) to William Carlucci (FRBNY
Examiner) and copying Jeff Stehm (RBOPS).
Business sensitive
information on a number
of financial institutions
supervised by the Federal
Reserve.
000099 above.
000099 above.
Withheld in
Full
1
000384 September 14, 2008 continuation of email which
attached above spreadsheet (#000383). In this
email, William Carlucci requests additional
information on AIG.
000092-93 above.
Redacted 1
#000384, above. In this email, Jeff Stehm
responds to request for more information.
000092-93 above.
Redacted 1
Page 34 of 96
Material
Full or
Redacted
number
of pages
William Nelson to William English, Roberto Perli,
Michael Gibson and Jon Greenlee and copying
Brian Madigan and James Clouse.
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
12
000399 DUPLICATE of #000099 but inadvertently not
marked duplicate.
Exemption 4 , Exemption 8
000400 DUPLICATE of #000100 but inadvertently not
marked duplicate.
Exemption 4, Exemption 8
000401 September 14, 2008 email from FRBNY President
Geithner, forwarded by FRBNY staff member to
Board and FRBNY staff, attaching documents
about the Pros and Cons on AIG lending to
Chairman Bernanke and Governor Kohn.
address.
000068 above.
Redacted 1
000402-403 Memorandum prepared by FRBNY staff entitled,
"Pros and Cons of Lending to AIG." This document
is attached to email #000401, above.
regarding lending to AIG.
000130-134 above.
Withheld in
Full
2
Page 35 of 96
Material
Full or
Redacted
number
of pages
000404 Spreadsheet entitled, "Counterparty Exposure
Report" details the firms with the largest
exposures to AIG. This document is attached to
email #000401, above.
Sensitive commercial or
provided by AIG listing
exposure of various
financial institution
counterparties to AIG.
000097 above. In the
alternative, disclosure is
likely to cause substantial
competitive injury to the
counterparties listed in the
document.
000130-134 above.
Withheld in
Full
1
000405-000410 Powerpoint presentation by FRBNY staff entitled,
"AIG Subsidiaries: Are they a Source of Strength?"
provides information on AIG subsidiaries based on
publicly available information. This document is
attached to email #000401, above.
FRBNY staff analysis on
AIG.
000130-134 above.
Redacted 2
000411 September 14, 2008 email between Board staff
regarding discussion on LFI exposures to AIG.
000115-116 above.
Exemption 8. (not marked
on document) See Bates
000099 above. This
document also contains
discussions among Board
and/or FRB supervisory staff
regarding information
needed to be obtained from
LCBOs regarding AIG.
Redacted 1
Page 36 of 96
Material
Full or
Redacted
number
of pages
#000401, above. In this email, Governor Kohn
discusses comments he believes should be added
to the "Pros and Cons of Lending to AIG"
document. The email chain also includes a
DUPLICATE inadvertently not marked as a
duplicate of email #000401.
000072 above.
Redacted 1
000413 September 14, 2008 email from Patricia Mosser to
various Board and FRBNY staff, passing on a
message from the AIG CEO and NYSID Vice
Chairman regarding capital injection plans for AIG.
The identity of possible
investors in AIG.
000096-97 above. This
document contains the
names of potential investors
in AIG provided voluntarily
by AIG to Board/FRBNY staff.
Redacted 1
Jon Greenlee to William Nelson.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
8
Page 37 of 96
Material
Full or
Redacted
number
of pages
#000413, above. In this email, Deborah Bailey,
forwards email #000413, to Chairman Bernanke,
the Board of Governors and other high level Board
employees with a brief summary.
The identity of a possible
investor in AIG and
address.
000068 above.
Redacted 1
000428 September 14, 2008 email from William English to
Brian Madigan asking whether there is anything to
be done on AIG.
William English's phone
number.
000030-31 above.
Redacted. 1
#000413, above regarding capital injection plans
for AIG. Here, Adam Ashcraft responds.
000092-93 above.
Withheld in
Full
1
000433 September 14, 2008 email from Chris Haley
(Federal Reserve Bank of Boston Vice President)
to various Federal Reserve System employees,
summarizing highlights of a discussion with Stefan
Gavell (Vice President of State Street).
Discussion of supervised
financial institution's plans
in the event of an AIG
bankruptcy.
000099 above.
000099 above.
Redacted 2
Page 38 of 96
Material
Full or
Redacted
number
of pages
000442-000445 September 14, 2008 meeting notes, summarizing
a Conference Call with Eric Dinallo,
Superintendent of NYSID, regarding the financial
condition of AIG. This document is attached to a
September 14, 2008 email from Diane Fraser to
Christopher Calabria and copying various FRBNY
staff.
Internal analysis of
commercially sensitive and
supervisory information on
AIG's financial condition.
this document.
00092-93 above. These
notes prepared by a Board
staff member were
circulated to more senior
Board staff as well as staff at
the FRBNY.
000169-170 above.
Withheld in
Full
4
Chairman Bernanke, FRBNY President Geithner
and copying Brian Madigan, Scott Alvarez, and
Deborah Bailey regarding request for Federal
Reserve credit from AIG.
The identity of potential
investors in AIG and
internal analysis regarding
strategies for AIG.
address is also redacted.
000072 above.
000068 above.
Redacted 1
000449-000460 DUPLICATE of #000387-000398 but inadvertently
not marked as duplicate.
recommendations
regarding AIG.
Full
12
Sandy Krieger (FRBNY Executive Vice President)
regarding avenues for AIG.
Internal deliberations. Exemption 5. See 000092-93
above.
Redacted 1
Page 39 of 96
Material
Full or
Redacted
number
of pages
Sandy Krieger regarding communicating updates
on AIG.
Internal deliberations. Exemption 5. See 000092-93
above.
Redacted 1
000464-000465 September 15, 2008 email to various Board and
FRBNY staff entitled, "SGNY updates." This email
provides updates of a call with Societe Generale.
The email is mostly non-responsive but includes a
note on AIG exposures.
regarding Societe Generale.
000099 above.
000099 above.
Redacted 3
000466-000467 September 15, 2008 email from William Nelson to
Brian Madigan entitled, "Fw: My proposed insert
to Monetary Affairs partial memo draft." This
email suggests language for the memo entitled,
"Issues Related to Possible Lending to American
International Group."
regarding language for
draft document.
000466-67 above.
Redacted 2
document is attached to email #000466-000467,
above.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
8
Page 40 of 96
Material
Full or
Redacted
number
of pages
document is an attachment to a September 15,
2008 email from William Nelson to Brian Madigan
entitled, "aig's value is down 44 percent this
morning ..."
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
12
000495 September 15, 2008 email from Governor Warsh
to Michelle Smith (Office of the Board Members
Director) regarding strategies for AIG.
contains an internal, pre-
decisional communication
between a Board member
and a Board staff member
regarding AIG's options.
Disclosure of
on intra-agency
communications.
Redacted 1
Page 41 of 96
Material
Full or
Redacted
number
of pages
Lending to American International Group." This
William Nelson to Brian Madigan, is a later draft of
document #000478-000489, above.
staff analyses and
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
12
Chairman Bernanke, FRBNY President Geithner
and other high level Board staff regarding whether
government assistance should be provided to AIG.
Chairman Bernanke's e-
mail address.
000072 above.
000068 above.
Redacted 1
000521-000532 Duplicate of #000498-000509, inadvertently not
staff analyses and
recommendations
regarding AIG.
Full
12
000538-000549 Duplicate of #000498-000509, inadvertently not
staff analyses and
recommendations
regarding AIG.
Full
12
Page 42 of 96
Material
Full or
Redacted
number
of pages
000555 September 15, 2008 email from Alejandro LaTorre
to Gustavo Suarez and copying other Board staff
entitled, "RE: AIG Commercial Paper
Outstandings."
Identity of another
financial institution with
AIG commercial paper
outstanding.
document requests
information on AIG
commercial paper
outstanding to a specific
financial institution. The
name of the institution is
withheld because it would
reveal institutions the Board
was concerned would be
harmed in the event of an
AIG bankruptcy. Possible
ripple effects on other
financial institutions played a
part in the Board's decision
to authorize a loan to AIG.
Redacted 1
000559 September 15, 2008 email from John Harvey
(FRBNY Bank Examiner) to FRBNY's LFI CPC
Updates email group, providing a Deutche Bank
Clearing and Settlement Update.
Commercially sensitive and
regarding AIG.
000099 above.
000099 above.
Redacted 1
Page 43 of 96
Material
Full or
Redacted
number
of pages
000561 September 15, 2008 email from Richard
Westerkamp (Federal Reserve Bank of Richmond
Assistant Vice President) to various Federal
Reserve System staff contains an Interoffice
Memo from Federal Reserve Bank of Richmond
Bank Examiner, Ryan Rehorn entitled, "Wachovia
Counterparty Call, 7:00 am on Lehman, WaMu,
AIG, ML."
regarding AIG.
000099 above.
000099 above.
Redacted 4
000564-000565 September 15, 2008 email from Brad Evens
(Federal Reserve Bank of Richmond) to various
Federal Reserve System staff entitled, "BAC -
Counterparty Credit Update - Restricted FR (highly
sensitive)."
regarding Bank of America.
000099 above.
000099 above.
Redacted 2
000566-000571,
000578, 000586,
000591, 000599,
000698
September 12, 2008 spreadsheet of BAC's tear
sheet data of counterparty exposures for AIG. This
document is an attachment to email #000564-
000565, above.
Sensitive and supervisory
information regarding
various financial
institutions.
000099 above.
000099 above.
Withheld in
Full
11
000614 September 15, 2008 email from Michelle Smith,
forwarding an email to Chairman Bernanke,
Governors Kohn and Warsh, Scott Alvarez, and
Brian Madigan entitled, "AIG mtg at FRBNY."
address.
000068 above.
Redacted 1
Page 44 of 96
Material
Full or
Redacted
number
of pages
000615 September 15, 2008 email exchange between
Diann Townsend (Federal Reserve Bank of
Minneapolis Assistant Vice President), Coryann
Stefansson (BS&R Associate Director) and Kwayne
Jennings (Credit Union Treasurer) entitled, "AIG
and Wamu," regarding AIG exposures.
regarding exposures to AIG
by Wamu.
Exemption 4. See 000099
above. In addition to
exposure to AIG, this
document discusses a Board-
regulated bank's exposure to
Wamu. Competitive injury is
not claimed for Wamu,
which failed.
000099 above.
Redacted 1
000616 DUPLICATE of #000614 inadvertently not marked
as a duplicate.
address.
000617 DUPLICATE of #000614 inadvertently not marked
as a duplicate.
address.
000622-000623 September 15, 2008 email from Thomas O'Keefe
(FRBNY Bank Supervisor) to various Federal
Reserve System staff entitled, "AM Liquidity
Update," providing the major themes from the
CPC updates.
regarding exposure to AIG
by various supervised
Exemption 4. See 000099
above. In addition to
exposure to AIG, this
document discusses various
sources of liquidity accessed
by Board-regulated banks.
000099 above.
Redacted 2
Page 45 of 96
Material
Full or
Redacted
number
of pages
000625 September 15, 2008 email from Scott Alvarez to
William Nelson suggesting an edit to the
Lending to American International Group."
recommendations
regarding AIG.
000071 and 0000115-116
above (this e-mail provides
legal advice to a Board staff
member regarding edits to a
draft memo to the Board,
and is also an intra-agency,
pre-decisional
communication)
Redacted 1
000627-000635 DUPLICATE OF #000192-000201 inadvertently not
Non-public corporate
structure information
prepared by SNL Financial
re AIG.
Exemption 4 Withheld in
Full
9
Page 46 of 96
Material
Full or
Redacted
number
of pages
000638 September 15, 2008 email from an outside
finance professional to Patrick McCabe (Board
Economist) expressing concerns about AIG.
Identity and personal
information about a family
member of the finance
professional.
0000001 above.
contains personal
information about a family
member of the finance
professional conveyed to a
FRBNY employee as a "P.S."
to the e-mail. Disclosure this
information, which does not
shed light on government
operations, would constitute
a clearly unwarranted
invasion of the finance
professional's and the family
member's personal privacy
which outweighs de minimis
public interest in disclosure.
Redacted 1
000640-000643 DUPLICATE OF #000442-000445 inadvertently not
Internal analysis of
commercially sensitive and
supervisory information on
AIG's financial condition.
Exemption 4, Exemption 5
and Exemption 8.
Withheld in
Full
4
Page 47 of 96
Material
Full or
Redacted
number
of pages
000644-000645 September 15, 2008 email from Antonio Alvarez
(FRBNY) to FRBNY's LFI CPC Updates email group,
entitled "Citi Counterparty Update 9-15-08 AM."
regarding AIG exposures.
000099 above.
000099 above.
Redacted 2
000648-000650 September 15, 2008 email from Martin Mallett
(Bank of England), relayed to the Board by the UK
Financial Services Authority (FSA), providing an
update on financial markets.
information provided by
foreign bank supervisors.
contains an update on
market conditions in Europe
on the date of the e-mail
provided to Board staff by
the FSA, a "person" under
FOIA. The update was
voluntarily provided and
consists of commercial or
financial information that
would not customarily be
disclosed to the public by the
provider. In the alternative,
disclosure likely would
information in the future as
foreign bank regulators, such
as the FSA, provide such
information on the
understanding that it will be
kept confidential.
Redacted 3
Page 48 of 96
Material
Full or
Redacted
number
of pages
000653 September 15, 2008 Market Event Analysis Table
attached to email #000648-000651, above.
000648-651 above.
Withheld in
Full
1
000656 September 15, 2008 Office Memorandum sent
from Paul Austin (FRBNY) to Files, providing a
summary of a call with UBS regarding
counterparties. This memorandum, labeled,
"Restricted FR" is an attachment to a September
15, 2008 email from Paul Austin to various Federal
Reserve System staff.
various financial
institutions and UBS
exposure to AIG.
000099 above.
000099 above.
Withheld in
Full
1
000658 September 15, 2008 email chain between various
FRBNY staff regarding UBS follow-up and
Counterparty Monitoring.
information and
information obtained from
supervised institutions
regarding exposure to
various institutions
including AIG.
000099 above.
000099 above.
Redacted 1
Page 49 of 96
Material
Full or
Redacted
number
of pages
000663 Spreadsheet with financial information regarding
AIG Federal Savings Bank. This document is
Holly Kirkpatrick (Board Analyst) to Danielle Little
(Board).
Supervisory information
obtained from an FRB
regarding AIG FSB.
not claim exemption 4 for
this document.
on document) This
document contains
information obtained by the
Board from an FRB regarding
the FRB's exposure to AIG
Federal Savings Bank
through a daylight overdraft
at the Discount Window
(DW). The Board obtained
the information in its
capacity as regulator and
supervisor of the FRBs to
ensure the safety and
soundness of the FRB in the
event AIG FSB was unable to
repay its daylight overdraft.
Withheld in
Full
1
Page 50 of 96
Material
Full or
Redacted
number
of pages
000663 con't The information was
obtained to assess the risks
to the clearing, payment and
settlement system, or
supervised financial
institution participants, from
a possible AIG bankruptcy.
reports prepared by , on
agency (the Board)
responsible for the
000664 September 15, 2008 email from Moses Cheng
(FRBNY Bank Examiner) to various Federal Reserve
System staff, entitled "DB September 15, 2008
Credit Risk Management Morning Update."
various financial
institutions and
information from regulated
institutions regarding
exposure to AIG.
000099 above. In addition
to AIG, this document
discusses exposure to
Lehman Bros.
000099 above.
Redacted 1
000666 September 15, 2008 email from Patrick McCabe to
an Patrick Dwyer (FRBNY) regarding outside
concerns about MMF exposure to Lehman and
AIG.
Identity of individual and
firm expressing concern.
000001 above.
Redacted 1
Page 51 of 96
Material
Full or
Redacted
number
of pages
000667 September 15, 2008 email from James Embersit
(BS&R) to Jon Greenlee and copying other BS&R
staff, summarizing a call with FRBNY regarding
plans for tackling AIG and other market concerns.
000115-116 above.
Redacted 1
000669 September 15, 2008 email from Diane Dobbeck
(FRBNY Vice President of Credit Risk) to various
Board and FRBNY staff entitled, "AIG & identifying
other firms under stress," which provides an
outline for moving forward.
plans.
000092-93 above.
Redacted 1
000672 September 15, 2008 email from Danielle Little to
Board RBOPS staff, regarding AIG's Federal Savings
Bank account information.
regarding AIG FSB.
not claim exemtion 4 for this
document.
000663 above.
Redacted 1
000673 Spreadsheet attached to email #000672, above,
regarding AIG account information.
regarding AIG FSB.
this document.
000663 above.
Withheld in
Full
1
000674 Spreadsheet attached to email #000672, above,
regarding AIG account information.
regarding AIG FSB.
this document.
000663 above.
Withheld in
Full
1
Page 52 of 96
Material
Full or
Redacted
number
of pages
finance professional to Patrick Parkinson,
delivering market information and questioning the
operations process.
Information obtained from
a confidential market
source.
000001 above.
Redacted 1
000676 September 15, 2008 email from John Harvey to
FRBNY's LFI CPC Updates email group, entitled "DB
Clearing & Settlement update #3 - Final or today
(9/15/08)."
regarding various financial
institutions.
000099 above.
000099 above.
Redacted 1
finance professional to Gustavo Suarez, William
Dudley and Chris Burke delivering market
information.
Information obtained from
a confidential market
source.
000001 above.
Redacted 1
000678 September 15, 2008 email from Coryann
Stefansson to BS&R staff, asking them to keep an
eye out for issues with AIG, Lehman, etc.
000115-116 above.
000099 above. This
document also includes
regarding the need to obtain
information from LCBOs
regarding AIG.
Redacted 1
Stefansson to Board and FRBNY staff regarding
AIG and identifying other firms under stress. NOT
A DUPLICATE but inadvertently marked duplicate.
Internal/supervisory
deliberations.
000092-93 above.
000678 above.
Redacted 1
Page 53 of 96
Material
Full or
Redacted
number
of pages
#000678, above. This email from Chris Haley
(Federal Reserve Bank of Boston Vice President)
summarizes a high level meeting regarding MMF
redemptions.
regarding supervised
financial institution.
000099 above.
000099 above.
Redacted 1
000685 September 15, 2008 email from Jeremy Carter
(Federal Reserve Bank of Richmond Bank
Examiner) to Jennifer Burns (Federal Reserve Bank
of Richmond), Lisa White (Federal Reserve Bank of
Richmond) and Richard Westerkamp discussing
exposures to AIG. [document #000687 is non-
responsive, but inadvertantly not marked non-
responsive]
regarding supervised
000099 above.
000099 above.
Redacted 1
Lending to American International Group." This
on AIG's operations, staff's analysis of the sources
of its current difficulties, an assessment of its
liquidity and solvency, a discussion of the possible
costs and benefits of IPC lending to the firm, and a
staff recommendation regarding such lending.
The consolidated balance sheet and income
statement are provided. This attachment to a
September 15, 2008 email from William Nelson to
Brian Madigan is a later draft of document
#000498-000509, above.
recommendations
regarding AIG.
000087-90 above.
Withheld in
Full
13
Page 54 of 96
Material
Full or
Redacted
number
of pages
000720 September 15 e-mail from Thomas J. O'Keefe to
various FRBNY and Board staff re "Afternoon
Liquidity Team Update."
Name of confidential
market source.
000001 above.
redacted 1
000723-000724 September 15, 2008 email from Jeffrey Levine
(FRBNY) to FRBNY's LFI CPC Updates email group
entitled, "JPMC: Liquidity Update from afternoon
meeting with Treasury," which provides highlights
from a call with JPMC's treasury.
regarding JPMC.
000099 above.
000099 above.
Redacted 2
000726 September 15, 2008 email from Alejandro LaTorre
to various Board and FRBNY staff, discussing a
future call with the insurance department
regarding AIG.
regarding potential future
events.
000092-93 above.
Redacted 1
000729-000735 September 15, 2008 email from Patricia Mosser to
FRBNY staff, NYSID staff, and AIG, setting up a call
to include the Board of Governors and a follow up
call.
Personal phone numbers. Exemption 6. See Bates
000030-31 above.
Redacted 7
000736-000740 Attachment which provides materials for the call
discussed in email #000729-000735, above.
[redactions are marked in black, inadvertantly
obscuring the claimed exemptions (4 and 8)].
information regarding AIG
obtained from AIG on a
voluntary basis.
000096-97 above.
this document.
Withheld in
Full
5
Brian Madigan, William Nelson, Jon Greenlee, and
William English entitled, "Notes from 3pm call
with AIG, NYSID, FRBNY." The notes focus on the
securities lending program and the overall plan for
AIG.
Supervisory plans for AIG
discussing information
obtained from NYSID in
course of supervision of
AIG.
Exemption 4 (not marked on
document) See Bates
000096-97 above.
000169-170 above.
Redacted 1
Page 55 of 96
Material
Full or
Redacted
number
of pages
000746 September 15, 2008 email from Rita Proctor
(Chairman Bernanke's Assistant) , forwarding
email #000743, above to the Chairman.
address.
000068 above.
Redacted 1
#000743, above, In this email, Jon Greenlee
provides analysis on the call notes. A DUPLICATE
of email #000743 is inadvertently not marked as a
duplicate.
Supervisory deliberations
regarding AIG, discussing
NYSID in course of
supervision of AIG.
document) See Bates
000096-97 above.
000169-170 above.
Redacted 1
#000743, above. In this email, William Nelson
asks Michael Gibson a question about the plan for
AIG. A DUPLICATE of email #000743, is
inadvertently not marked as a duplicate.
personal cell phone
number.
000115-116.
000030-31 above.
Redacted 1
#000748, above. In this email, Michael Gibson
answers Nelson's question regarding the plan for
AIG. A DUPLICATE email #000748 is inadvertently
not marked as a duplicate.
000115-116.
Redacted 1
000750 Duplicate of email #000749 inadvertently not
Internal deliberations. Exemption 5. Redacted 1
Page 56 of 96
Material
Full or
Redacted
number
of pages
000752 September 15, 2008 email from Brian Madigan to
Chairman Bernanke, Governor Kohn and Scott
Alvarez providing an updated draft of the memo
on AIG entitled, "Issues Related to Possible IPC
Lending to American International Group," and a
response from Chairman Bernanke providing
feedback on the memo.
address.
000495 above. This e-mail
among Chairman Bernanke,
a Board member, and Board
staff members weighing
options in responding to the
AIG situation. Disclosure of
on intra-agency
communications.
000068 above.
Redacted 1
memorandum entitled, "Issues Related to Possible
IPC Lending to American International Group." The
document is an attachment to email #000752,
above.
000087-90 above.
Withheld in
Full
12
Page 57 of 96
Material
Full or
Redacted
number
of pages
000768-000769 September 15, 2008 email from FRBNY Thomas J.
O'Keeffe to a large number of Federal Reserve
System staff, providing and Afternoon Liquidity
Team Update.
regarding several financial
institutions.
000099 above.
000099 above.
Redacted 2
000771 September 15, 2008 email from Sola Majolagbe
(FRBNY Examiner) to a large number of FRBNY and
Board staff. This email provides notes from a
conference with Richard Evans (Chief Risk Officer
for Institutional Clients Group) on the European
Market condition.
regarding several financial
institutions.
000099 above.
000099 above.
Redacted 1
000772 September 15, 2008 email from Philip Aquilino
(Federal Reserve Bank of San Francisco) to
FRBNY's LFI CPC Updates email group entitled,
"WFC 9/15 Update (as of 2pm PST)." The email is
mostly non-responsive, but touches on AIG
exposure.
regarding Wells Fargo.
000099 above.
000099 above.
Redacted 2
Brian Madigan attaching an updated draft of an
AIG memo and noting some edits that were made
to the memo.
personal cell phone
number.
000115-116 above.
000030-31 above.
Redacted 1
Page 58 of 96
Material
Full or
Redacted
number
of pages
memorandum entitled, "Issues Related to Possible
IPC Lending to American International Group." The
attachment to email #000778, above is an
updated draft of document #000753-000764.
000087-90 above.
Withheld in
Full
11
000790 September 15, 2008 email Mark Carey (Board IF
Adviser) to International Finance (IF) Officers and
Section Chiefs entitled, "International
ramifications of an AIG failure." The email
provides a broad-brush picture of AIG's business.
Board staff internal
speculations regarding
international ramifications
of an AIG failure.
000115-116 above.
Redacted 1
high level Board staff, attaching a draft of an AIG
memo.
Personal phone number. Exemption 6. See Bates
000030-31 above.
Redacted 1
000793 September 15, 2008 email from Paul Bhatti
(FRBNY Examiner) to FRBNY's LFI CPC Updates
email group entitled, "UBS Market Risk Update."
The email is mostly non-responsive, but touches
on AIG exposure.
regarding UBS.
000099 above.
000099 above.
Redacted
Page 59 of 96
Material
Full or
Redacted
number
of pages
000806 September 15, 2008 document, headed "Monday,
September 15th 6:00 PM Infrastructure Status
Report" and "F.R. Restricted." This attachment to
a September 15, 2008 email from Melissa
Vanlandingham to Jeff Stehm and Jeffrey
Marquardt (RBPOS), is mostly non-responsive,
but contains information regarding payments to
AIG.
regarding AIG and other
000099 above.
000099 above.
Redacted 1
000809 September 15, 2008 email from Linda Rodriguez
entitled, "Barclays Liquidity/Funding Update &
Charts (3pm & 5pm calls)." The email, headed
"Restricted FR," is mostly non-responsive, but
contains information regarding AIG.
regarding Barclays Global.
000099 above.
000099 above.
Redacted 1
000812 September 15, 2008 email from outside analyst to
Board and FRBNY staff entitled, "CP Market
Update." The email discusses AIG and the market
issues.
confidential market source.
000001 above.
Redacted 1
000813 September 15, 2008 email from Antonio Alvarez
to FRBNY's LFI CPC Updates email group entitled,
"Citi Counterparty Update 9-15-08 PM." The email
is mostly non-responsive, but contains
information regarding AIG exposures.
regarding Citibank.
000099 above.
000099 above.
Redacted 1
Page 60 of 96
Material
Full or
Redacted
number
of pages
000815 September 15, 2008 email from Bart Simon (FRBB
Analyst) to several Federal Reserve System staff
entitled, "AIG - other factors," summarizing
information obtained in conversations with senior
insurance brokers.
000001 above.
Redacted 1
000816-000817 September 15, 2008 email from Hasan Latif to
FRBNY's LFI CPC Updates email group entitled, "SG
Market Risk Update 9/15." The email is mostly
non-responsive, but contains information
regarding regulated
000099 above.
000099 above.
Redacted 2
#000813-000814. This email from Nancy Berlad
(BS&R) to Coryann Stefansson, highlights the AIG
portion of email #000813, above.
regarding Citibank.
000099 above.
000099 above.
Redacted 1
000820 September 15, 2008 email from Jack Jennings
(BS&R) to BS&R staff entitled, "Summary of
Foreign Supervisors Call, September 15, 4:00
p.m." The email is mostly non-responsive, but
does discuss concerns regarding AIG's financial
position.
Exemption 4. See Bates 648-
51 above. In this document,
confidential commercial or
financial information is
voluntarily provided to
Board staff by a number of
foreign central banks, which
do not customarily disclose
this information to the
public.
Redacted 1
Page 61 of 96
Material
Full or
Redacted
number
of pages
000823 Attachment to September 15, 2008 email from
Peter DeMontravel to New York Bank Support.
The document is headed "Liquidity Meeting at 3
PM with Deutsche Banks Treasury September 15,
2008" and "F.R. Restricted." The attachment is
mostly non-responsive, but contains information
regarding AIG payments.
regarding AIG and
Deutsche Bank.
000099 above.
000099 above.
Redacted 1
000837 September 15, 2008 email from Timothy Carlin
(FRBNY) to FRBNY's LFI CPC Updates email group,
entitled "Barclays Ops Update" and headed,
"Restricted FR." The email contains Barclays
Operational information involving AIG.
regarding AIG and Barclays.
000099 above.
000099 above.
Redacted 1
000838-000840 September 15, 2008 email from James Wall
(FRBNY Assistant Vice President) to FRBNY's LFI
CPC Updates email group entitled, "Consolidated
BNYM CPC Team 9/15 Recap." The email is mostly
non-responsive, but contains information
regarding AIG.
regarding AIG and BNYM.
000099 above.
000099 above.
Redacted 3
Page 62 of 96
Material
Full or
Redacted
number
of pages
000843 September 15, 2008 document headed "Monday,
Marquardt, is mostly non-responsive, but contains
information regarding payments to AIG.
The majority of the
document is non-
responsive. A small portion
discusses AIG exposure of a
Board-regulated financial
institution.
Board or its delegee, the
FRBNY, from Board-
regulated financial
institutions that participate
in the clearing, payment and
settlement system and that
made/received payments or
settled transactions on
behalf of AIG. This
information was provided on
a mandatory basis by the
financial institutions as a
result of the Board's
supervisory authority.
Disclosure is likely to cause
substantial competitive
injury to financial institutions
that provided the
information or their
customers.
Redacted 1
Page 63 of 96
Material
Full or
Redacted
number
of pages
000843 con't In the alternative, disclosure
is likely to impair the Board's
ability to obtain similar,
necessary information in the
future by diminishing the
quality or reliability of
information.
document). This
information was obtained by
the Board, or its delegee, the
FRBNY, as a result of its
oversight authority over
financial institutions. The
information was obtained to
assess the risks to financial
institutions or to the
clearing, payment and
settlement system from a
possible AIG bankruptcy.
Page 64 of 96
Material
Full or
Redacted
number
of pages
000843 con't This information is contained
agency (the Board)
responsible for the
000845 September 15, 2008 email from an FRBNY
Examiner to various Federal Reserve staff entitled,
"DB September 15, 2008 Credit Risk Management
Update 2." The email is mostly non-responsive,
but touches on AIG exposure.
regarding Deutsche Bank.
000099 above.
000099 above.
Redacted 1
to Chairman Bernanke and Governor Kohn
regarding the severity of AIG's capital hole.
Identity of outside analyst
email address.
000001 above.
000068 above.
Redacted 1
Page 65 of 96
Material
Full or
Redacted
number
of pages
000848 September 15, 2008 email from Michelle Smith, in
response to email #000847, above. The email
summarizes a discussion with FRBNY President
Geithner regarding AIG.
address.
000495 above. In this e-
mail, a Board staff member
summarizes for Board
members her discussion with
FRBNY president Geithner
regarding options in
responding to the AIG
situation.
000068 above.
Redacted 1
000849 September 15, 2008 email from Rita Proctor,
forwarding email #000819-000820, above to the
Chairman.
address.
000068 above.
Redacted 1
000851 September 15, 2008 document headed, "Monday,
Marquardt is mostly non-responsive, but contains
information regarding AIG issues.
regarding AIG and other
000843 above.
000843 above.
Redacted 1
Page 66 of 96
Material
Full or
Redacted
number
of pages
#000848, above. In this email, Brian Madigan
provides his comments on logistics surrounding
working out the AIG capital problem.
address.
000495 and 000071 above.
In this pre-decisional e-mail
chain, ending with Bates
000858 below, Board staff
members discuss with
several Board members their
advice regarding responding
to a logistical matter that
arose in connection with the
AIG situation. The staff
members copy the Board's
General Counsel in order to
obtain his legal advice, and
the General Counsel
responds with legal advice,
and the communications
therefore are also protected
by attorney-client privilege.
000068 above.
Redacted 1
#000854, above. In this email, Michelle Smith
provides an update on AIG discussion logistics and
asking a question.
address.
000854 above.
000068 above.
Redacted 1
Page 67 of 96
Material
Full or
Redacted
number
of pages
#000855. In this email, Brian Madigan confirms
agreement with the update on logistics.
address.
000854 above.
000068 above.
Redacted 1
#000855. In this email, Scott Alvarez responds to
Michelle Smith's question.
address.
000854 above.
000068 above.
Withheld in
Full
1
forwarding a Wall Street Journal News Alert
entitled, "S and P cuts AIG's credit rating" to
Chairman Bernanke, Governors Kohn and Warsh,
Brian Madigan and Scott Alvarez.
address.
000068 above.
Redacted 1
000860 September 15, 2008 continuation email #000847,
above, from Governor Kohn to Scott Alvarez and
Patrick Parkinson, regarding AIG's capital hole.
address.
000495 above.
000068 above.
Withheld in
Full
1
Stefansson to Brian Peters entitled, "What was the
outcome of the aig meeting?"
Personal cell phone
number.
000030-31 above.
Redacted 1
000862 September 16, 2008 continuation from email
#000861, above regarding the AIG meeting.
Personal cell phone
number.
000030-31 above.
Redacted 1
000863-000864 September 16, 2008 continuation from email
#000862, above regarding the AIG meeting.
Personal cell phone
number.
000115-116 above.
000030-31 above.
Redacted 2
Page 68 of 96
Material
Full or
Redacted
number
of pages
000865 September 16, 2008 email from Robert Hoyt
(Treasury General Counsel) to Treasury staff, Scott
Alvarez and FRBNY President Geithner attaching a
document entitled, "Use of Existing Authority."
Internal deliberations. Exemption 5. In this pre-
decisional, inter-agency
communication from a
Treasury Dep't official to
several Treasury staff
members, the Board's
General Counsel, and the
President of the FRBNY staff,
in the FRBNY's role as a
consultant to the Board, the
Treasury official outlines a
number of options regarding
the use of existing agency
authority to address the AIG
situation. Disclosure of
one would have a chilling
effect on inter-agency
communications.
Redacted 1
000866 "Use of Existing Authority" attachment to email
#000865, above. The document provides legal
authority for AIG scenarios.
Internal legal deliberations. Exemption 5. See Bates
000865 above.
Withheld in
Full
1
James Clouse regarding systemic risk concerns in
the market.
000001 above.
Redacted 2
Page 69 of 96
Material
Full or
Redacted
number
of pages
#000859 entitled, "S and P cuts AIG's credit
rating" In this email, Chairman Bernanke
provides next steps.
address.
000495 above. In this e-
mail, Chairman Bernanke
discusses with a Board staff
member and a Board
member actions to be taken
before an upcoming Board
meeting.
000068 above.
Redacted 1
000870 Governor Warsh forwards email #000869, above
to Governor Kohn without comment.
address.
000068 above.
Redacted 1
#000870, above. In this email, Governor Kohn
also lays out next steps for continuing discussion
on AIG.
address.
00083 above.
000068 above.
Redacted 1
replies to Chairman Bernanke asking if she should
put together an update call.
address.
000068 above.
Redacted 1
confirms that she completed the request of
Chairman Bernanke.
address.
000068 above.
Redacted 1
Nathan Sheets (Board Director of International
Finance) regarding systemic risk concerns in the
market.
000001 above.
Redacted 2
Page 70 of 96
Material
Full or
Redacted
number
of pages
Margaret Owens (Governor Warsh's Executive
Assistant) and then forwarded to Governor Warsh,
regarding systemic risk concerns in the market.
000001 above.
Redacted 2
000878 September 16, 2008 email from Patrick McCabe, a
Board staff member, to Patrick Dwyer entitled,
"AIG & MMFs?" asking a question about MMFs
and stating beliefs about other AIG instruments.
000092-93 above.
Redacted 1
000882 September 16, 2008 email from Roberto Perli to
Brian Madigan and copying other Board staff
entitled, "liquidity conditions yesterday from
CPCs." In the email, a Board staff member
provides information obtained by FRBNY
examiners from supervised financial institutions
Name of supervised
providing information
regarding AIG exposure.
000099 above.
000099 above.
Redacted 1
000883 James Clouse forwards email #000882, above
along with a note on redemption requests to
Board BS&R staff Coryann Stefansson and
Deborah Bailey on September 16, 2008.
Personal cell phone
number.
000030-31 above.
Redacted 1
000884 Coryann Stefansson's September 16, 2008
response to email #000883, above. Stefansson
provides an opinion on the forwarded
information.
personal cell phone
number.
000115-116 above.
000030-31 above.
Redacted 1
Page 71 of 96
Material
Full or
Redacted
number
of pages
Chairman Bernanke, Governors Kohn and Warsh,
FRBNY President Geithner, Scott Alvarez, and
Brian Madigan discussing possible legislative
proposals on financial reform. The email is
forwarded on to Patrick Parkinson and FRBNY staff
for additional discussion September 15-16, 2008.
address.
000072 above. In this pre-
decisional e-mail exchange,
Board members, Board staff
members, and FRBNY
President Geithner discuss
possible legislative proposals
related to the AIG situation.
000068 above.
Redacted 4
000891 Scott Alvarez's September 16, 2008 response to
Robert Hoyt (Treasury) to email #000865, above
regarding use of existing authority. Alvarez
conveys the Board's preference on terms
discussed in Hoyt's email.
Inter-agency deliberations. Exemption 5. See Bates
000865 above.
Redacted 1
000893 Draft memorandum from Board staff to Chairman
Bernanke and Governors Kohn and Warsh
regarding AIG and commercial paper. This
document is an attachment to a September 16,
2008 email from Nellie Liang to Daniel Covitz and
Gustavo Suarez.
Draft, pre-decisional memo
to Board.
Exemption 4. (the Board will
this document)
000087-90 above.
Withheld in
Full
1
requesting views on AIG's liquidity and capital
needs from an outside analyst.
Inadvertently marked as
exempt -- document has
been provided in
unredacted form to the
requester.
No exemption claimed. Redacted 1
Page 72 of 96
Material
Full or
Redacted
number
of pages
000895 Robert Hoyt's (Treasury) September 16, 2008
response to Scott Alvarez's email #000891, above.
Hoyt responds to the Board's preference on
terms.
000865 above.
Redacted 1
000896 September 16, 2008 email from Brad Evans
(Federal Reserve Bank of Richmond) FRBNY's LFI
CPC Update group entitled, "Briefing email: BAC -
Overview of Enterprise actions (7.30am meeting
Senior Enterprise Executive Cmte)." The email
notes AIG issues.
obtained by FRB examiners
from supervised LCBO.
000099 above.
000099 above.
Redacted 1
000898-000899 Attachment to email forwarded between Board
economists on September 16, 2008 is a draft
memo to Chairman Bernanke and Governors Kohn
and Warsh regarding AIG and commercial paper.
This is an updated draft of #000893, above.
Draft, pre-decisional
memo to Board.
Exemption 4. (the Board will
this document). Exemption
5. See Bates 000087-90
above.
Withheld in
Full
2
to Michelle Smith asking her to draft material
regarding AIG.
000495 above.
Redacted 1
reaching out to FRBNY for assistance on drafting
the AIG material requested by Governor Warsh in
#000900, above.
000495 above.
Redacted 1
000902 September 16, 2008 email from Todd
Waszkelewicz (FRBNY) to various FRBNY and
Board staff entitled, "Today's outlook for CLS."
The email relays a rumor regarding possible
developments with AIG.
Business sensitive
FRB examiners from
institutions.
000843 above.
document) See Bates
000843 above.
Redacted 1
Page 73 of 96
Material
Full or
Redacted
number
of pages
to Dan Jester (Treasury), requesting information
on AIG.
Pre-decisional, inter-
agency deliberations.
000865 above.
Redacted 1
000904 September 16, 2008 email from Dan Jester to
Governor Warsh providing the information Warsh
requested in email #000903, above.
000865 above.
Redacted 1
000906 Draft resolution on AIG prepared for the Board by
its attorneys. This document is an attachment to a
September 16, 2008 email from Rich Ashton
(Board Attorney) to Mark Van Der Weide (BS&R)
and Sophia Allison (Board Attorney).
Internal draft document. Exemption 5. See Bates
000071 and 000087-90
above. This pre-decisional
draft resolution regarding a
possible loan to AIG
prepared for the Board by its
attorneys is both an intra-
agency deliberative
document and is protected
by the attorney-client
privilege.
Withheld in
Full
1
requesting information on market developments
from an outside source and the source's response.
Identity of confidential
market source.
000001 above.
Redacted 1
#000904, above. In this email, Governor Warsh
asks a question about the information provided by
Dan Jester.
000865 above.
Redacted 1
Page 74 of 96
Material
Full or
Redacted
number
of pages
000911-000912 Draft memo to Chairman Bernanke and Governors
Kohn and Warsh regarding AIG and commercial
paper. This attachment to a September 16, 2008
email from Daniel Covitz to Nellie Liang, is an
updated draft of #000898-000899, above.
Draft, pre-decisional memo
to Board.
this document. Exemption
5. See Bates 000087-90
above.
Withheld in
Full
2
000915 September 16, 2008 email between Federal
Reserve Bank of Philadelphia staff and forwarded
to Board staff entitled, "Summary of actions for
Lehman Brothers FSB and AIG FSB." The email
contains financial information regarding AIG,
confidential bank examination information
obtained from OTS supervisors of AIG FSB, and
conveyed to FRB examiners, and a summary of
recent actions taken by the Federal Reserve Bank
of Philadelphia in regards to AIG.
Business sensitive
information, internal
deliberations and bank
regarding AIG FSB.
regarding the financial
condition of AIG FSB
obtained by its supervisor,
OTS, from AIG FSB, a person,
and provided to Board or
FRB staff, disclosure of which
competitive injury to AIG
FSB.
000092-93 above.
000020 above.
Redacted 1
Page 75 of 96
Material
Full or
Redacted
number
of pages
000918-000924 Attachment to a September 16, 2008 email from a
Board Attorney to Scott Alvarez and Interim
Assistant Secretary of the Treasury, Neel Kashkari.
The document, headed "Confidential Draft," is an
overview of legislation providing the Dept. of
Treasury with the authority to assist non-bank
Draft internal document. Exemption 5. See Bates
000865 above. This pre-
decisional, inter-agency draft
legislative proposal was
prepared and circulated by a
Board attorney to more
senior Board and Treasury
Dep't staff to assist in
crafting a response to the
ongoing AIG situation.
Disclosure of
on intra- and inter-agency
communications.
Withheld in
Full
7
000925 September 16, 2008 email between FRBNY staff
entitled, "CLS 9/16 update - morning." The email
is mostly non-responsive, but does provide a note
on AIG.
Business sensitive
information obtained in a
supervisory capacity.
000843 above.
000843 above.
Redacted 1
000926 September 16, 2008 email from Fang Du (BS&R)
to BSR Credit Risk email group entitled, "Banks
linked to $75 billion lending facility after AIG
rating downgrade."
Personal cell phone
number.
000030-31 above.
Redacted 1
000927-000928 September 16, 2008 email from Betsy Gordon
entitled, "payments-settlement ..update." The
email discusses AIG payments and margin calls.
Business sensitive
supervisory capacity by FRB
supervisory staff from an
LFI and a personal cell
phone number.
000099 above.
000030-31 above.
000099 above.
Redacted 2
Page 76 of 96
Material
Full or
Redacted
number
of pages
000929 September 16, 2008 email between Board
economists commenting on information obtained
while researching the attached document.
000115-116 above.
Redacted 1
000930-000931 Attachment to email #000929, above, regarding
AIG and commercial paper. This is an updated
draft of #000911-000912, above.
Draft, pre-decisional
memo to the Board.
this document. Exemption
5. See Bates 000087-90
above.
Withheld in
Full
2
entitled, "SG- 9/16 liquidity update 10.30am."
The email is mostly non-responsive, but does
provide a note on AIG haircuts.
Business sensitive
FRB supervisory staff from
LCBOs in a supervisory
capacity.
000099 above.
000099 above.
Redacted 1
FRBNY and Board BS&R staff regarding AIG and
Citi's financial entaglements.
Business sensitive
LCBO in a supervisory
capacity, internal
deliberations and a
personal cell phone
number.
000099 above.
000092-93 above.
000030-31 above.
000099 above.
Redacted 1
Page 77 of 96
Material
Full or
Redacted
number
of pages
000941-000943 Attachment to September 16, 2008 email from
Rich Ashton to Scott Alvarez, and Board BS&R and
legal staff. The document, labeled "Draft,"
discusses the authority of the Federal Reserve to
make an advance to AIG.
Draft internal memo. Exemption 5. See Bates
000071 and 000087-90
above. This pre-decisional
draft memo prepared by
Board attorneys and
circulated to Board staff,
including more senior Board
staff, provides legal analysis
regarding the Board's
statutory authority to
authorize a loan to AIG. It is
both an intra-agency pre-
decisional deliberative
communication and
protected by attorney-client
privilege.
Withheld in
Full
3
#000939, above, regarding AIG and Citi's financial
entanglements.
Business sensitive
capacity and internal
deliberations.
000099 above.
000099 above.
Redacted 1
entitled, "CLS update 9/16 11am." The email
notes AIG.
Business sensitive
FRB examiners from
institutions.
000843 above.
000092-93 above.
000843 above.
Redacted 1
Page 78 of 96
Material
Full or
Redacted
number
of pages
#000896, above entitled, "Briefing email: BAC -
Overview of Enterprise actions (7.30am meeting
Senior Enterprise Executive Cmte)."
Business sensitive
capacity, internal
deliberations and a
personal cell phone
number.
000099 above.
000092-93 above.
000030-31 above.
000099 above.
Redacted 1
000947 September 16, 2008 email from an FRBNY
employee to FRBNY's LFI CPC Updates email
group, entitled "Barclays Ops Update" and
headed, "Restricted FR." The email contains
Barclays Operational information involving AIG.
regarding AIG and Barclays.
000099 above.
000099 above.
Redacted 1
000949-000954 Attachment to September 16, 2008 email
between FRBB staff entitled, "CS AIG
commentary," and providing commentary on AIG
from Credit Suisse.
Non-Public commentary on
AIG prepared by Credit
Suisse.
000034-39 above.
Withheld in
Full
6
Michelle Smith, Calvin Mitchell (FRBNY-
Communications), Thomas Baxter (FRBNY General
Counsel) and Scott Alvarez regarding Geithner's
directive to draft a statement on AIG.
000092-93 above.
Redacted 1
Page 79 of 96
Material
Full or
Redacted
number
of pages
000957-000959 Attachment to September 16, 2008 email from
Sophia Allison to Scott Alvarez, Kieran Fallon
(Board Attorney), Stephanie Martin (Board
Attorney) and Mark Van Der Weide. The
document, labeled "Draft," discusses the authority
of the Federal Reserve to make an advance to AIG
and is an updated version of attachment #000941-
000943, above with comments from Sophia
Allison.
Draft internal memo. Exemption 5. See Bates 941-
943 above.
Withheld in
Full
3
#000939, above, regarding AIG and Citi's financial
entanglements.
Business sensitive
capacity, internal
deliberations and a
personal cell phone
number.
000099 above.
000092-93 above.
000099 above.
Redacted 1
000961 September 16, 2008 email from Moses Cheng to
various Federal Reserve System staff entitled, "DB
September 16, 2008 Market Risk Management
Morning Update." The email discusses AIG
exposure.
regarding Deutsche Bank.
000099 above.
000099 above.
Redacted 1
000964 This document, a draft AIG resolution, is an
Board counsel to Board BS&R and counsel staff.
Internal draft document. Exemption 5. See Bates
000906 above.
Withheld in
Full
1
Page 80 of 96
Material
Full or
Redacted
number
of pages
FRBNY President Geithner and Thomas Baxter
commenting on the attachment in #000964,
above.
000071, 000092-93 and
000906 above. The
President and General
Counsel of the FRBNY, in
their capacity as consultants
to the Board in this matter,
are within the attorney-
client relationship.
Redacted 1
000966 DUPLICATE of #000964 - inadvertently not marked
as a duplicate.
Full
1
Thomas Baxter regarding AIG loan, responding to
000965 above.
000965 above.
Redacted 1
#000955 from Calvin Mitchell to Michelle Smith,
discussing drafting a statement on AIG.
000955 above.
Redacted 1
000970-000971 Attachment to email for from Nellie Liang to the
Board of Governors and other high level Board
staff on September 16, 2008. The attachment is a
draft memo to Members of the Board regarding
AIG and commercial paper. This is an updated
draft of #000930-000931, above.
Business sensitive
and internal deliberations.
000087-90 above.
Withheld in
Full
2
Page 81 of 96
Material
Full or
Redacted
number
of pages
000973-000974 Attachment to email between Board economists
on September 16, 2008. The attachment is a draft
memo to Members of the Board regarding AIG
and commercial paper. This is an updated draft of
#000930-000931, above.
Business sensitive
000087-90 above.
Withheld in
Full
2
000976 September 16, 2008 email from Jeff Stehm to
various Board and FRBNY staff entitled, "Known
AIG US Infrastructure participation."
Personal cell phone
number.
000030-31 above.
Redacted 1
000977 Attachment to email #000976, above is a list of
AIG affiliates participation in DTCC, OCC, CME, et
al.
Business sensitive
FRB supervisory staff in a
000843 above.
000843 above.
Withheld in
Full
1
Scott Alvarez, the Board's General Counsel, and
Neel Kashkari and Terrence Checki of the Treasury
Dep't.
000865 above. This pre-
decisional, inter-agency e-
mail comments on a draft
legislative proposal and
discusses the agencies'
options going forward.
Disclosure of
one would chill inter-agency
communications.
Redacted 3
#000979-80, above, regarding the draft legislative
proposal.
000979-80 above.
Redacted 1
Page 82 of 96
Material
Full or
Redacted
number
of pages
000982 September 16, 2008 email from a Board analyst to
an FRBNY examiner entitled, "AIG clearing
broker/dealer, settling bank, outstanding CP."
Business sensitive
supervisory capacity and
internal deliberations.
000843 above.
000092-93 above.
000843 above. This
document also contains
regarding the need to obtain
additional information from
instituions regarding their
relationship with AIG.
Redacted 1
000983 Attachment to email #000982, above, entitled,
"Selected Affiliated Members of Payments and
Settlement Systems," and listing
Business sensitive
000843 above.
000843 above.
Withheld in
Full
1
#000981, above, regarding draft legislative
proposal.
Pre-decisional inter-agency
deliberations.
000979-980 above.
Redacted 1
000987 September 16, 2008 email from Jeffrey Levine to
FRBNY's LFI CPC Updates email group entitled,
"JPMC: Liquidity Update from 10:30am
conversation with Treasury." The email is mostly
non-responsive, but contains a note on AIG
exposures.
obtained by FRB
LCBOs.
000099 above.
000099 above.
Redacted 1
Page 83 of 96
Material
Full or
Redacted
number
of pages
#000984, above, regarding draft legislative
proposal.
000979-80 above.
Redacted 1
000995-001003 This document, prepared by Citigroup Global
Markets, Equity Research, is an attachment to a
September 16, 2008 email (#000990) from a
Board BS&R employee to various Board staff and
is entitled, "Company Focus, American
International Group, Inc. (AIG)."
prepared by Citigroup
Global Markets.
000034-39 above.
Withheld in
Full
9
001004-001009 This document, prepared by Morgan Stanley
Research, is an attachment to a September 16,
2008 email (#000990) from a Board BS&R
employee to various Board staff prepared by and
is entitled, "American Int'l Grp, Quick Comment."
prepared by Morgan Stanly
Research.
000034-39 above.
Withheld in
Full
6
001010-001018 This document, prepared by RBC Capital Markets,
is an attachment to a September 16, 2008 email
(#000990) from a Board BS&R employee to
various Board staff and is entitled, "Industry
Comment." The document discusses AIG.
Non-Public Credit opinion
prepared by RBC Capital
Markets.
000034-39 above.
Withheld in
Full
9
001047-001052 This document is an attachment to a September
16, 2008 email (#000990) from a Board BS&R
employee to various Board staff and is entitled,
"Corporate Highlights." The document discusses
AIG.
Non-Public Credit opinion
prepared by Moody's.
000034-39 above.
Withheld in
Full
6
Page 84 of 96
Material
Full or
Redacted
number
of pages
William Nelson and Board Librarian, Krista Box
attaching Standard and Poor's "Ratings Direct"
reports on AIG. The reports are not attached.
Personal cell phone
number.
000030-31 above.
Redacted 1
entitled, "Counterparty Update 9/16/08 - Midday"
and labeled, "Restricted FR." The email discusses
exposures of AIG counterparties.
obtained by FRB
LCBOs.
000099 above.
000099 above.
Redacted 1
Krista Box, seeking additional information to the
information Box sent in email #001061, above.
Personal cell phone
number.
000030-31 above.
Redacted 1
001067 September 16, 2008 email from Edgar Moreano
(FRBNY Examiner) to various Federal Reserve staff
entitled, "AIG drawing on its credit line." The
email discusses JPMC's exposure to AIG.
Business sensitive
JPMC, obtained by FRB
supervisory staff in a
000099 above.
000099 above.
Redacted 1
001068 September 16, 2008 email from Carol Roller
(FRBNY Examiner) to FRBNY's LFI CPC Updates
email group. The email is entitled, "Barclays credit
update - morning 9/16" and is labeled, "Restricted
FR." The email discusses Barclays' exposure to
AIG.
Business sensitive
Barclays, obtained by FRB
supervisory staff in a
000099 above.
000099 above.
Redacted 1
FRBNY and Board staff forwarding an attachment
entitled, "AIG settling banks info."
Personal cell phone
number.
000030-31 above.
Redacted 1
Page 85 of 96
Material
Full or
Redacted
number
of pages
001070 Attachment to email #001069, above with
financial information for AIG settling banks.
Business sensitive
financial institutions in a
000843 above.
000843 above.
Withheld in
Full
1
Board and FRBNY staff providing comments on the
attached DTC Intraday Balance Report.
obtained by FRB
supervisory staff , Internal
deliberations and Personal
cell phone numbers.
000843 above.
000092-93 above.
000030-31 above.
000843 above.
Redacted 2
Page 86 of 96
Material
Full or
Redacted
number
of pages
Diann Townsend (Federal Reserve Bank of
Minneapolis Assistant Vice President) and Board
staff regarding AIG exposures.
supervisory information,
Personal cell phone
numbers.
discusses information
obtained by OCC from
regulated banks regarding
their exposure to AIG, and
provided to FRB and Board
staff. Provision of this
information by regulated
banks to the OCC was
mandatory. Disclosure is
likely to cause substantial
provided.
000092-93 above.
000030-31 above.
Redacted 1
Page 87 of 96
Material
Full or
Redacted
number
of pages
001079 con't Exemption 8. This document
discusses supervisory
information obtained by FRB
supervisory staff from the
Office of the Comptroller of
the Currency (OCC) regarding
exposure of OCC regulated
banks to AIG.
001080 September 16, 2008 email from Ralph Santasiero
(FRBNY) to FRBNY's LFI CPC Updates email group.
The email provides notes from discussions held
with Bank of New York Mellon management.
supervisory information.
000099 above.
000099 above.
Redacted 1
001081 September 16, 2008 email from a Federal Reserve
Bank of San Francisco (FRBSF) employee to
FRBNY's LFI CPC Updates email group and other
FRBSF staff. The email provides an update on
Wells Fargo, including exposures to AIG.
000099 above.
000099 above.
Redacted 1
Page 88 of 96
Material
Full or
Redacted
number
of pages
001084 September 16, 2008 email from Philip Aquilino to
Board International Finance staff entitled, "AIG's
ability to trade foreign exchange on EBS
(confidential)."
Business sensitive
information.
financial information was
voluntarily provided to
Board staff by EBS, a foreign
exchange trading platform in
the UK, which would not
customarily disclose the
information to the public. In
the alternative, disclosure
would impair the Board's
ability to obtain similar
this document.
Redacted 1
Page 89 of 96
Material
Full or
Redacted
number
of pages
001086-001093 Attachment to an email from Nellie Liang to the
Board of Governors and other high level Board
staff on September 16, 2008 is a memo with
attached charts and tables to Members of the
Board regarding AIG and commercial paper. This
appears to be the final version of #000970-
000971, above.
Business sensitive
third party provider under
agreement to maintain
confidentiality and intra-
agency, pre-decisional
communications.
Exemption 4: (not marked on
document) See Bates
000034-39 above (a portion
of this document contains
information obtained
voluntarily from a third party
provider under
confidentialtiy agreement).
Exemption 5. A portion of
this final, pre-decisional
memo provides staff analysis
and opinion regarding
current conditions in the
commercial paper market
and market treatment of AIG
commercial paper. The
memo informed the Board's
process with regard to AIG,
and disclosure would chill
the decisionmaking process.
A version of
this
document
with exempt
materials
redacted will
be provided
to the
requester.
8
001094 Continuation of September 16, 2008 email
exchange between Scott Alvarez, Neel Kashkari,
and Terrence Checki (#000979-80) commenting
on a draft legislative proposal.
Inter-agency, pre-
decisional deliberations.
80 above.
Redacted 1
Page 90 of 96
Material
Full or
Redacted
number
of pages
#001081-001082, above forwards Wells Fargo
information with comments to Governors Duke,
Kohn and Kroszner and Governor Duke asks a
question about the information. Part of this email
is inadvertently marked as a duplicate and it is not
a duplicate.
Pre-decisional, intra-agency
communications.
000495 above. This e-mail,
and Bates 001096 below,
contain a request for
clarification from a Board
member to a Board staff
member, and the staff
member's response.
Redacted 1
001096 September 16, 2008 response from Deborah
Bailey to Governor Duke's question in email
#001095, above. Part of this email is a duplicate
communications.
1095 above.
Redacted 1
001097 September 16, 2008 email from Jennifer Lucier
(Board) to Marsha Takagi (FRBNY) sending draft
minutes of Payments and Settlement and Tri-Party
Calls. The email is mostly non-responsive but
mentions AIG's potential plans.
and personal cell phone
number.
000843 above.
000030-31 above.
000843 above.
Redacted 1
001102 September 16, 2008 email from Paul Webster
(FRBB) to various Federal Reserve staff and
forwarded on to more Federal Reserve staff. The
email, entitled, "RBS Funding Update - 9/16/08,"
discusses AIG's market effect.
000099 above.
000099 above.
Redacted 1
Page 91 of 96
Material
Full or
Redacted
number
of pages
001104-001108 Attachment to September 16, 2008 email
(#001103) from a Morgan Stanley employee to
Governor Warsh entitled, "Implications of
Bankruptcy." The document discusses market
implications of an AIG bankruptcy.
Business sensitive
outside consultant
(Morgan Stanley) to
Treasury Department, and
conveyed by Morgan
Stanley (on Treasury's
behalf) to Gov. Warsh to
inform the Board's internal
deliberations regarding
whether to extend credit to
AIG.
000034-39 above.
Exemption 5. This draft
document, prepared for
discussion purposes, was
conveyed by a Morgan
Stanley employee, in its
capacity as a consultant to
the Treasury Dep't on the
AIG matter, to Board
Governor Warsh. The draft
discusses possible market
implications of an AIG
bankruptcy and played a part
in the Board's deliberations
regarding whether to
authorize a loan to AIG.
Disclosure of inter-agency
one would chill the Board's
Withheld in
Full
5
Page 92 of 96
Material
Full or
Redacted
number
of pages
001109 Attachment to September 16, 2008 email
(#001103) from a Morgan Stanley employee to
Governor Warsh entitled, "To Do List." The
document lays out a plan and timetable.
Business sensitive
outside consultant
(Morgan Stanley) to
Treasury Department, and
conveyed by Morgan
Stanley (on Treasury's
behalf) to Gov. Warsh to
inform the Board's internal
deliberations regarding
whether to authorize credit
to AIG.
000034-39 above.
1104-08 above.
Withheld in
Full
1
001110 September 16, 2008 email from a Board BS&R
analyst to the BSR LIG email group entitled,
"Breakout of Lehman and AIG exposures" seeking
work on a project. Coryann Stefansson responds
that some of the work may have been completed
already.
Inter-agency, pre-
decisional deliberative
materials, discussions
among Board and FRB
supervisory staff regarding
information needed from
LCBOs regarding exposure
to AIG and personal cell
phone number.
000115-116.
000030-31 above.
000982 above.
Redacted 1
forwarding a document from Calvin Mitchell to
Chairman Bernanke. The document is entitled,
"Rationale."
address.
000068 above.
Redacted 1
001112 Attachment to email #001111, above, is a draft
Statement prepared by Board staff for Board
review discussing the rationale for lending to AIG.
Draft document. Exemption 5. See Bates
000087-90 above.
Withheld in
Full
1
Page 93 of 96
Material
Full or
Redacted
number
of pages
001113 September 16, 2008 email from John Lawton (U.S.
Commodity Futures Trading Commission) to
various FRBNY and CFTC staff regarding AIG
liquidations.
Inter-agency
communication.
Exemption 5. (The Board will
not claim Exemption 5 for
this document. The Board
will refer this document to
the CFTC for disposition).
Redacted 1
001116 Attachment to September 16, 2008 email from
Brian Madigan to Michelle Smith entitled,
"Background for Decision to Lend to AIG" is a draft
memo.
000087-90 above.
Withheld in
Full
1
Page 94 of 96
Material
Full or
Redacted
number
of pages
001119-001120 September 17, 2008 email from an FRBNY risk
specialist, forwarding to Board staff documents
used the previous day by FRBNY staff as input to
an AIG summary document prepared for FRBNY
President Geithner.
communications.
document from FRBNY staff,
in its capacity as a consultant
forwards to Board staff
attachments, #001121-1134
below, prepared by FRBNY
staff and reviewed the
previous day by President
Geithner in preparation for
advising the Board on
possible responses to the
AIG situation. The
attachments, prepared by
FRBNY staff for President
Geithner's review, discuss
pros and cons and various
Board and FRBNY in
responding to the crisis.
Redacted 2
Page 95 of 96
Material
Full or
Redacted
number
of pages
001119-1120
con't
These documents informed
the Board's overall decision-
making process, in which the
FRBNY played a part.
Disclosure of intra-agency
communications such as
these would chill the Board's
001121-001123 Attachment to email #001119-001120, above
entitled, "Proposal to Reissue Stable Value
Business for AIG."
communications.
001119-20 above.
Withheld in
Full
3
001124-001125 Attachment to email #001119-001120 above
entitled, "Systemic issues in AIG failure," which
explores the way an AIG failure would impact the
financial system.
communications.
001119-20 above.
Withheld in
Full
2
entitled, "Systemic Impact of AIG Bankruptcy."
communications.
001119-20 above.
Withheld in
Full
3
entitled, "Pros and Cons of Lending to AIG."
communications.
001119-20 above.
Withheld in
Full
2
001131 Attachment to email #001119-001120, above
entitled, "Retail nature," which evaluates retail
disruptions stemming from the crisis in confidence
an AIG failure would cause.
communications.
001119-20 above.
Withheld in
Full
1
entitled, "AIG Bankruptcy Considerations," which
discusses the impact on subsidiaries.
communications.
001119-20 above.
Withheld in
Full
1
Page 96 of 96
Material
Full or
Redacted
number
of pages
entitled, "Summary of AIG's market risk
positioning," which looks at how AIG is positioned
relative to other banks in order to assess the
potential for asset price stress associated with
unwinding or liquidation.
communications.
001119-20 above.
Withheld in
Full
1
entitled, "AIG Summary 16 September 2008."
communications.
001119-20 above.
Withheld in
Full
1
Exhibit J
Index of Documents Withheld in Response to FOIA Request 2010-267 of Vern McKinley (Lehman), dated June 1, 2011
Page 1 of 106
Material
Full or
Redacted
number
of pages
000002 July 10, 2008 email from Deborah Bailey
(Banking Supervision and Regulation (BS&R))
to The Board of Governors, Roger Cole
(Director of BS&R), Brian Madigan (Director
of Monetary Affairs (MA)) and Scott Alvarez
(Board General Counsel) and then forwarded
to Federal Reserve Board Chairman Ben
Bernanke, providing a briefing on Lehman.
address.
shed light on the operations
of the government, would
constitute a clearly
unwarranted invasion of his
personal privacy, which
Redacted 1
000004 July 10, 2008 continuation of email #000002,
above. In this email, Scott Alvarez asks
Deborah Bailey to brief him on Lehman by
phone.
Personal phone number. Exemption 6. Disclosure of
staff members' personal
phone numbers, which do
not shed light on
government operations,
would constitute a clearly
unwarranted invasion of
their personal privacy which
Redacted 1
000006 July 10, 2008 email from Kieran Fallon
(Board Attorney) to Patrick Parkinson
(Director of BS&R) sending Fallon's phone
numbers in order for Parkinson to call and
receive details on a structure being
contemplated for Lehman.
Personal phone number. Exemption 6. See Bates
000004 above.
Redacted 1
Page 2 of 106
Material
Full or
Redacted
number
of pages
000009 July 11, 2008 email from David Marshall
(Federal Reserve Bank of Chicago Senior Vice
President) to Patrick Parkinson, William
Dudley (Federal Reserve Bank of New York
(FRBNY) Executive Vice President), Patricia
Mosser (FRBNY), William English (Monetary
Affairs (MA)) and copying Pat White
(Research & Statistics (R&S)) and Alejandro
LaTorre (FRBNY) and a response from Patrick
Parkinson to Pat White regarding investors
that pulled repo lines from Lehman.
Identifying information or
tri party repo investors.
contains identifying
information of confidential
market sources who
voluntarily provided
information relating to
Lehman Brothers to Board or
Federal Reserve Bank of New
York (FRBNY) staff. The
identity of these sources is
information and these
persons would not
public the fact that they had
provided this information to
Board or FRBNY staff.
Redacted 1
000009 con't Alternatively, disclosure of
these identities likely would
obtain necessary information
in the future as confidential
market sources would be
unlikely to provide
their identifying information
would be disclosed.
Page 3 of 106
Material
Full or
Redacted
number
of pages
000010-000011 July 11, 2008 email from Lucinda Brickler
(FRBNY) to Patrick Parkinson entitled, "PDCF,
Tri-party variant," which provides comments
on the attached document.
members of Board staff and
FRBNY staff, in its role as a
requesting views, exchanging
opinions, and/or gathering
Lehman's liquidity problems,
possible effects of a Lehman
bankruptcy on financial
institutions and markets,
possible actions by the Board
and/or FRBNY to maintain
stability in the triparty repo
market or other financial
markets, and related issues,
as part of the Board's
process in responding to
Lehman's liquidity situation.
Some later communications
include staffs at other FRBs.
Redacted 2
Page 4 of 106
Material
Full or
Redacted
number
of pages
000010-11 con't Later discussions include
staffs of other FRBs, in their
role as consultants to the
Board, as is apparent from
the face of the document.
Disclosure of
on intra-agency
communications.
Page 5 of 106
Material
Full or
Redacted
number
of pages
000012-000020 July 11, 2008 draft memorandum to Tim
Geithner (FRBNY President) regarding
Managing a Loss of Confidence in a Major Tri-
party Repo Borrower. This memorandum is
attached to email chain #000010-000011,
above and specifically to a July 11, 2008
email from Til Schuermann (FRBNY Senior
Vice President) to various FRBNY staff.
Draft memorandum. Exemption 5. Pre-decisional
draft memo from FRBNY
staff, in its role as a
consultant to the Board, to
FRBNY president Geithner,
forwarded to members of
Board staff, presenting
analysis or opinion regarding
FRBNY and/or Board to
provide liquidity to Lehman
and/or to manage a loss of
market confidence in the
event of a Lehman
bankruptcy. A copy of this
draft was provided to Board
staff as part of the Board's
overall process of deciding
whether to authorize the
FRBNY to extend credit to
Lehman. Disclosure of
on intra-agency
communications.
Redacted 9
Page 6 of 106
Material
Full or
Redacted
number
of pages
000021 July 12, 2008 email from Lucinda Brickler to
various Board and FRBNY staff entitled,
"another option we should present re
triparty?" The email discusses options for
solving Lehman's tri-party repo problem.
000010-11 above.
Redacted 1
000022-000026 May 23, 2008 memorandum entitled,
"FRBNY Liquidation Facility" and headed,
"Restricted F.R." This attachment to email
#000021, above, discusses a solution for
avoiding deteriorating confidence in the tri
party repo market.
000012-20 above. This May
2008 internal FRBNY memo
was provided to Board staff
in July 2008 to inform the
Board's decision-making
process relating to Lehman's
capital and liquidity crisis.
The memo proposes
solutions to avoid
deterioration in the tri-party
repo markets in the event of
a run on a dealer, and
discusses advantages and
disadvantages of various
options. Disclosure of intra-
agency communications such
as these would have a
chilling effect on the Board's
Withheld in
Full
5
Page 7 of 106
Material
Full or
Redacted
number
of pages
above entitled, "Re: another option we
should present re triparty?" In this email,
Meg McConnell (FRBNY) responds,
commenting on the solutions discussed
above for the Lehman tri-party repo
problem.
000010-11 above.
Redacted 1
Jamie McAndrews (FRBNY) summarizes
points from Antoine Martin (FRBNY).
000010-11 above.
Redacted 1
Joseph Sommer (FRBNY) provides questions
and comments on the proposed solutions for
Lehman's tri-party repo issues.
000010-11 above.
Redacted 1
Patrick Parkinson provides comments on
proposed solutions to Lehman's tri-party
repo issues.
000010-11 above.
Redacted 1
Page 8 of 106
Material
Full or
Redacted
number
of pages
000031-000032 July 13, 2008 email chain continuing from
email #000030, above. In this exchange,
Antoine Martin (FRBNY), William Brodows
(FRBNY) and Joseph Sommer, each provide
comments on proposed solutions for
Lehman.
000010-11 above.
Redacted 2
000033 July 13, 2008 continuation of email #000031-
000032, above entitled, "Re: another option
we should present re triparty?" In these
emails, Patrick Parkinson and Joseph
Sommer provide comments on proposed
solutions for Lehman.
000010-11 above.
Redacted 1
000034 July 13, 2008 continuation of "Re: another
option we should present re triparty?"
emails above. In this email, Jamie
McAndrews provides comments on
proposed solutions for Lehman.
000010-11 above.
Redacted 1
Page 9 of 106
Material
Full or
Redacted
number
of pages
000036-000038 August 8, 2008 email exchange between
Christopher Laursen (BS&R), Patrick
Parkinson, Norah Barger (BS&R) and Barbara
Bouchard (BS&R) regarding Tri-party repo.
members of Board staff
requesting views, exchanging
opinions, and/or gathering
Lehman's solvency, possible
effects of a Lehman
bankruptcy on regulated
financial institutions,
possible actions by the Board
and/or FRBNY to maintain
stability in the triparty repo
or other markets, and
related issues, as part of the
Board's ongoing decision-
making process in
responding to Lehman's
liquidity situation. Disclosure
on intra-agency
communications.
Redacted 3
Page 10 of 106
Material
Full or
Redacted
number
of pages
000036-38 con't Exemption 8. This document
contains discussions among
Board and/or Federal
Reserve Bank (FRB)
supervisory staff re the need
to obtain information from
Board-regulated large
financial instiututions (LFIs)
(also called large complex
banking organizations
(LCBOs)) regarding their
exposure to Lehman through
the tri-party repo market or
otherwise, the methods by
which information is
gathered, and related
supervisory topics, to enable
staff to assess the risks to
LFIs from exposure to
Lehman.
Page 11 of 106
Material
Full or
Redacted
number
of pages
00036-38 con't This information is contained
agency (the Board and its
delegees, the FRBs)
responsible for the
000039 August 13, 2008 email from Scott Alvarez,
the Board's general counsel, to Brian
Madigan regarding Treasury setting up
contingency planning teams.
000036-38 above. In
addition to being pre-
decisional, this document
contains a confidential
communication from the
Board's General Counsel to a
member of the Board's staff
requesting input on a legal
matter, which is protected
by attorney-client privilege.
Redacted 1
Page 12 of 106
Material
Full or
Redacted
number
of pages
000041-000044 August 8-15, 2008 email exchange between
Patrick Parkinson, Steven Shafran (Treasury)
and various FRBNY staff regarding
developing a game plan for Lehman.
Exemption 5. In this pre-
communication, Treasury
Dep't staff, Board staff, and
FRBNY staff, in the FRBNY's
role as a consultant to the
Board, discuss possible
options for responding to a
Lehman bankruptcy, the pros
and cons of various options,
exchange views, and discuss
additional information
needed to enable the
agencies to prepare for a
possible Lehman bankruptcy.
Disclosure of
effect on inter-agency
communications.
000036-38 above.
Redacted 4
000045 August 19, 2008 continuation of email
#000041-000044, above. In this email,
Patrick Parkinson provides questions and
comments on the game plan for Lehman.
000041-44 above.
Redacted 1
Page 13 of 106
Material
Full or
Redacted
number
of pages
000046-000047 August 19, 2008 email from Theodore Lubke
(FRBNY Senior Vice President) to Patrick
Parkinson and various FRBNY staff, attaching
a draft document regarding issues related to
Lehman's OTC derivatives and providing
comments. Parkinson sends an updated
version of the draft document with his
comments on August 21, 2008.
000010-11 above.
Redacted 2
Page 14 of 106
Material
Full or
Redacted
number
of pages
000048-000054 August 19, 2008 draft memorandum
entitled, " Patrick Parkinson comments on
OTC Derivatives issues related to failing
dealer v.1," and headed, "First Draft - Highly
Confidential." This document is attached to
an August 21, 2008 email from Parkinson to
various FRBNY staff. The document
discusses OTC derivatives issues to be
considered regarding the failure of a major
OTC derivatives dealer.
Draft memorandum. Exemption 5. Draft, pre-
decisional memo prepared
by FRBNY staff, in its role as
a consultant to the Board,
and circulated for comment
to Board staff. The draft
analyzes OTC derivatives
issues to be considered in
the event of the failure of a
major OTC derivatives
dealer, and the pros and
cons of various options. The
draft was circulated to Board
staff to inform its response
to Lehman's deteriorating
liquidity situation.
Disclosure of
on intra-agency
communications.
Withheld in
Full
7
Page 15 of 106
Material
Full or
Redacted
number
of pages
000056-000057 September 4, 2008 document entitled,
"Information Request for OTC Derivatives
Positions," lays out information sought from
Lehman regarding their OTC derivatives.
This document is attached to a September 4,
2008 email from Arthur Angulo (FRBNY
Banking Supervisor) to FRBNY President
Geithner and various Board and FRBNY staff.
regarding information
request.
Exemption 5. (not marked on
document) See Bates
000010-11 above.
Exemption 8. (The Board will
this document).
Withheld in
Full
2
Patrick Parkinson (Board) and Steven
Shafran (Treasury) regarding gathering
information on OTC derivatives. There is
also a September 5, 2008 email from
Parkinson to Theodore Lubke (FRBNY) asking
for review and comments on a draft email
intended for Shafran regarding a plan for
Lehman.
Draft email. Exemption 5. See Bates
000041-44 above.
Redacted 3
Page 16 of 106
Material
Full or
Redacted
number
of pages
000068 September 9, 2008 email from Patrick
Parkinson to Chairman Bernanke, Board
Governor Kevin Warsh and copying Brian
Madigan and Scott Alvarez regarding
Lehman raising capital.
address.
between members of the
Board's staff and Board
members providing advice
and seeking views on
matters relating to Lehman's
liquidity crisis. This e-mail
concerns an upcoming
telephone call to Lehman.
Disclosure of
on intra-agency
communications.
000002 above.
Redacted 1
Page 17 of 106
Material
Full or
Redacted
number
of pages
000069-000070 September 9, 2008 email from Lucinda
Brickler to various FRBNY staff entitled, "LB
triparty repo followup." This email with 3
attachments is then forwarded to Brian
Madigan, James Clouse (MA), and Pat White.
information regarding non-
PDCF eligible collateral held
by Lehman and Lehman's tri-
party repo counterparties.
FRBNY staff obtained the
information from supervised
clearing banks and provided
the information to Board
staff. Provision of this
information was mandatory.
Redacted 2
000069-70 con't Disclosure is likely to cause
substantial competitive
injury to financial
institution(s) described in the
communication or who
provided the information, or
to impair the Board's ability
to obtain similar, necessary
information in the future, by
reliability of information.
Page 18 of 106
Material
Full or
Redacted
number
of pages
000069-70 con't Exemption 8 (not marked on
document) This document
obtained by the FRBNY, the
Board's delegee, by virtue of
its supervisory authority over
JPMC, BNYM, and other
financial institutions which
cleared triparty repo
transactions on behalf of
Lehman. FRBNY staff
obtained this information in
order to assess the risks to
JPMC, BNYM and other
instiutions in the event that
counterparties were
reluctant to settle Lehman's
transactions.
Page 19 of 106
Material
Full or
Redacted
number
of pages
agency (the Board or its
delegee, the FRBNY)
responsible for the
000071-000072 This spreadsheet entitled, "LEHMAN
BROTHERS TRIPARTY REPO INVESTORS
(09/03/08)," provides the amounts and
percentages which various financial
institutions have invested in Lehman
Brothers. This spreadsheet is attached to
email #000069-000070, above.
000069-70 above.
document) See Bates 000069-
70 above.
Redacted 2
000077-000082 Document entitled, "Non-PDCF summary 08-
15-2008" analyzes tri-party data from the
clearing banks for August 6th, 2008. This
document is attached to email #000069-
000070, above.
superviosry information.
000069-70 above.
70 above.
Redacted 6
Page 20 of 106
Material
Full or
Redacted
number
of pages
000086-000089 July 14, 2008 continuation of email #000033,
above "Re: another option we should
present re triparty?" In these emails, Chris
McCurdy (FRBNY) and Patrick Parkinson
discuss the potential for an intra-day broker-
dealer bankruptcy filing and the SEC's
authority in resolving a CSE.
000010-11 above.
Redacted 4
000092-000093 July 15, 2008 email from William Dudley to
Chris McCurdy, Governor Donald Kohn,
Governor Warsh and copying Michael
Schetzel (FRBNY) entitled, "Lehman Good
Bank/Bad Bank idea discussed last night,"
which proposes a potential solution for
Lehman.
Board members and
members of the FRBNY staff,
in the FRBNY's role as a
presenting options and/or
providing comments on
possible responses to
Lehman's worsening liquidity
situation. Disclosure of
on intra-agency
communications.
Redacted 2
Page 21 of 106
Material
Full or
Redacted
number
of pages
000093, above entitled, "Lehman Good
Bank/Bad Bank idea discussed last night." In
this email, FRBNY President Geithner
requests some changes to the proposal
discussed above.
000092-93 above.
Redacted 1
000093, above entitled, "Lehman Good
Bank/Bad Bank idea discussed last night." In
this this email, Kieran Fallon provides
comments on the proposal for Lehman to
other Board staff members.
000036-38 above.
Redacted 1
000096-000097 July 15, 2008 email exchange between Scott
Alvarez and Kieran Fallon and copying Mark
VanDerWeide (BS&R) and Rich Ashton
(Board Attorney) regarding FRBNY's Super-
Structured Investment Vehicle Proposal.
000036-38 above.
Redacted 2
000098-000099 July 15-18, 2008 email from Lucinda Brickler
to FRBNY President Geithner and copying
various FRBNY staff, discussing the attached
break down of triparty collateral data
received from the clearing banks. Brickler
forwards the email to Patrick Parkinson with
additional comments.
000010-11 above.
Redacted 2
Page 22 of 106
Material
Full or
Redacted
number
of pages
000100-000102 July 14, 2008 spreadsheet entitled, "Tri-Party
Collateral Info Request," provides BNYM's
and JPMC's dealer collateral breakdown .
This spreadsheet is attached to email
#00098-00099, above.
000069-70 above.
document) See Bates
000069-70 above.
Redacted 3
Page 23 of 106
Material
Full or
Redacted
number
of pages
000105-000110 Spreadsheet entitled, "Collateral Analysis by
Customer 07-17-08," provides data
regarding collateral exposure of various
institutions, including Board-regulated
financial institutions, to Lehman. This
spreadsheet is attached to a July 18, 2008
email from Brian Begalle (FRBNY) to Lucinda
Brickler and copying Gary Guzman (FRBNY)
and Robert Rinaldi (FRBNY).
Board and/or FRB
regulated large financial
institution(s) (LFIs), financial
utilities or clearing banks
regarding their credit or
other exposure to Lehman
Brothers, exposure of their
customers or other financial
institutions, and related
financial information.
Provision of this information
was mandatory. Disclosure
provided.
Redacted 6
Page 24 of 106
Material
Full or
Redacted
number
of pages
000105-110 con't Exemption 8. This document
obtained by FRB and/or
Board supervisory staff from
supervised LFIs, financial
utilities or clearing banks
regarding financial
institutions' credit, triparty
repo, or other exposure to
Lehman in order to assess
the risks to supervised
financial institutions of a
possible Lehman bankruptcy.
agency (the Board or its
delegees, the FRBs)
responsible for the
Page 25 of 106
Material
Full or
Redacted
number
of pages
000111-000117 Spreadsheet entitled, "JPMC Collateral
Analysis by Customer 7-14-08," provides
collateral value for various financial
institutions. This spreadsheet is attached to
a July 15, 2008 email from Robert Rinaldi
(FRBNY) to William Brodows (FRBNY).
000105-10 above.
000105-110 above.
Redacted 7
000118-000124 Spreadsheet entitled, "Top 10 Dealers by Sec
Group Trend 7-14-08" compares market
value to collateral value. This spreadsheet is
attached to a July 15, 2008 email from
Robert Rinaldi to William Brodows.
000105-10 above.
000105-110 above.
Redacted 7
000125 July 20, 2008 email from Pat Parkinson to
Chairman Bernanke, Governor Kohn and
Governor Warsh entitled, "Our Options in
the Event of a Run on LB."
address.
000068 above. This
communication discusses
options in the event of a run
on Lehman.
000002 above.
Redacted 1
above entitled, "Our Options in the Event of
a Run on LB." Governor Kohn responds with
comments and questions.
address.
000125 above.
000002 above.
Redacted 1
a Run on LB. Brian Madigan provides
comments.
address.
000125 above.
000002 above.
Redacted 1
Page 26 of 106
Material
Full or
Redacted
number
of pages
a Run on LB. Here, Chairman Bernanke
provides comments.
address.
000125 above.
000002 above.
Redacted 1
000133-000135 Spreadsheet provides a derivatives summary
(Top 25 Counterparties by Current Exposure
to Lehman and and Top 25 Counterparties
by Deal Count) and a Lehman vs. Bear
comparison for an upcoming call. This
spreadsheet is attached to a Septemer 9,
2008 email from William Browdows to Meg
McConnell and various FRBNY staff.
000069-70 above.
70 above.
Redacted 3
analyst to Gustavo Suarez (Board economist)
regarding S&P putting Lehman on neg
watch.
outside analyst.
000009 above.
Redacted 1
Page 27 of 106
Material
Full or
Redacted
number
of pages
000138-000140 Document entitled, "tri-party bear versus
lb," provides the collateral value of Lehman's
tri-party repo book. This document is
Lucinda Brickler to Meg McConnell and
copying various FRBNY staff.
000010-11 above. This pre-
decisional FRBNY e-mail,
bcced to Board staff,
compares Lehman's tri-party
repo book to Bear Stearns'
in an effort to assess
possible outcomes of various
strategies with regard to
Lehman. A full list of
recipients does not appear
on the face of the document.
Redacted 3
Page 28 of 106
Material
Full or
Redacted
number
of pages
000146-000154 Spreadsheet entitled, "Global Repo Book for
Lehman for Sept. 5," provides a Global Repo
Maturity Schedule and a Global Under/Over
Funding Summary. This spreadsheet is
Jan Voigts (FRBNY) to FRBNY President
Geithner and various Board and FRBNY staff.
information.
FRBNY examiners on site at
Lehman under the Federal
Reserve's monitoring
program for primary dealers.
The FRBNY provided the
information to Board staff.
Lehman consented
voluntarily to provide the
information to FRBNY
examiners, and would not
customarily disclose it to the
public. In the alternative,
disclosure would likely
Redacted 9
Page 29 of 106
Material
Full or
Redacted
number
of pages
000146-54 con't Exemption 8. (not marked
on document) FRBNY
examiners were on site at
Lehman under the
monitoring program for
primary dealers in order to
monitor the financial and
funding position of primary
dealers, such as Lehman,
who might borrow at the
PDCF. The same information
was provided to Lehman's
consolidated supervisor, the
SEC. As described in an MOU
with the SEC, executed July
7, 2008, the Board and its
delegee, the FRBNY, agreed
to collaborate, cooperate,
and exchange information
with the SEC.
Page 30 of 106
Material
Full or
Redacted
number
of pages
agency (the SEC) responsible
for the regulation or
supervision of financial
institutions.
above entitled, "Re: Our Options in the
Event of a Run on LB." In this email,
Chairman Bernanke responds with an
additional option.
address.
000125 above.
000002 above.
Redacted 1
000156 July 21, 2008 continuation of email #000127
entitled, "Re: Our Options in the Event of a
Run on LB." In this email, Chairman
Bernanke responds with questions.
address.
000125 above.
000002 above.
Redacted 1
Run on LB." In this email, Brian Madigan
responds to Scott Alvarez and Patrick
Parkinson questioning legal issues.
address.
000125 above.
000002 above.
Redacted 1
Page 31 of 106
Material
Full or
Redacted
number
of pages
Event of a Run on LB." In this email, Patrick
Parkinson comments on Brian Madigan's
questions discussed above.
000125 above.
Redacted 1
Event of a Run on LB." In this email, Scott
Alvarez responds with his legal opinion of
Brian Madigan's questions discussed above.
address.
000125 above.
000002 above.
Redacted 1
000160-000162 July 20-21, 2008 continuation of email
#000157, above entitled, "Re: Our Options in
the Event of a Run on LB." Patrick Parkinson
responds to Brian Madigan's questions
discussed above and also asks additional
questions. Part of this chain is a DUPLICATE
of #000157, inadvertently not marked
duplicate.
address.
Exemption 5.
000002 above.
Redacted 3
000163 July 21 continuation of email #000158,
above entitled "Re: Our Options in the Event
of a Run on LB." Scott Alvarez responds to
Brian Madigan's questions discussed above
and also asks additional questions. Part of
this chain is a DUPLICATE of #000158,
Page 32 of 106
Material
Full or
Redacted
number
of pages
Run on LB." Patrick Parkinson provides ideas
and questions.
000125 above.
Redacted 1
Event of a Run on LB." Scott Alvarez
provides legal analysis.
000125 above.
Redacted 1
Event of a Run on LB." Patrick Parkinson
provides comments.
000125 above.
Redacted 1
Event of a Run on LB." Patrick Parkinson
provides comments and questions.
000125 above.
Redacted 1
000168 July 25, 2008 email from Jan Voigts to
various FRBNY staff providing financial data
for July 24-25 Lehman updates.
The names of entities that
provided additional
liquidity to Lehman are
redacted.
000146-54 above.
document) See Bates
000146-54 above.
Redacted 1
000177-000184 July 25, 2008 document entitled, "Lehman IB
Update" and headed "F.R. Restricted,"
provides Lehman financial information. This
document is attached to email #000168
above.
Supervisory information. Exemption 4. See Bates
000146-54 above.
document) See Bates
000146-54 above.
Redacted 8
Page 33 of 106
Material
Full or
Redacted
number
of pages
000185 July 30, 2008 email from Deborah Bailey to
Coryann Stefansson (BS&R) entitled, "Re:
Fw: <Additional Information> Tri-Party
Discussion w/ The LFIT Today, July 29, 2008,"
offers comments on the attached
documents.
000036-38 above.
contains discussions among
Board supervisory staff
regarding updated
supervisory guidance to be
provided to LFI supervisory
staff at the FRBs to enable
them better to assess and
manage the risks to LFIs
from exposure to Lehman
Brothers in tri-party repo
markets. Members of FRB
supervisory staff are
included in later discussions.
Redacted 1
delegees, the FRBs)
responsible for the
Page 34 of 106
Material
Full or
Redacted
number
of pages
000188-000190 Draft document entitled, "Near-term
Strategy to Enhance the Stability of the
Triparty Repo Market," and headed,
"Restricted F.R.," provides strategies for
improving confidence in the tri-party repo
market. This document is attached to a July
29, 2008 email, Bates 000185 above, from
Julie Dolan (FRBNY) to various Board and
FRBNY staff.
Draft document Exemption 5. See Bates
memo, discusses options for
enhancing stability in the
triparty repo market. The
memo automatically redated
when accessed for FOIA
purposes, and was originally
dated on or before the date
of the e-mail.
000185 above. This
document is a draft of
updated supervisory
guidance to be provided to
LFI supervisory staff at the
FRBs, and contains
discussion of exposures of
some specific LFIs obtained
by FRB supervisory staff from
regulated LFIs.
Withheld in
Full
3
Page 35 of 106
Material
Full or
Redacted
number
of pages
000191-000193 Draft document entitled, "Talking Points:
Near-term Measures to Enhance the Stability
of the Triparty Repo Market," and "Headed
Internal F.R." This document is attached to a
July 29, 2008 email, Bates 000185 above,
from Julie Dolan to various Board and FRBNY
staff.
000188-90 above.
000185 and 188-190 above.
These are draft talking points
to be used by LFI supervisory
staff at the FRBs when
discussing tri-party repo
market issues with
supervised LFIs .
Withheld in
Full
3
000194 August 1, 2008 email from Lucinda Brickler
to FRBNY President Geithner and copying
various FRBNY staff regarding clearing bank
margins update.
information.
000105-110 above.
110 above.
Redacted 1
000195-000196 Spreadsheet entitled, "BNYM JPMC Intraday
Margins," is attached to email #000194,
above.
information.
000105-110 above.
document) See Bates
000105-110 above.
Redacted 2
000198-000205 Spreadsheet entitled, "Lehman Fed
Summary Final 05.30.08," which provides
information on Lehman's derivative books.
This spreadsheet is attached to an August 4,
2008 email from William Brodows to various
Board and FRBNY staff.
000146-154 above.
000146-154 above.
Withheld in
Full
8
Page 36 of 106
Material
Full or
Redacted
number
of pages
Christopher Laursen and Patrick Parkinson,
regarding new expectations and guidance on
tri-party repos. Duplicate of #000036-38
above inadvertently not marked duplicate.
Exemption 5.
Exemption 8.
Redacted 2
000208-000210 DUPLICATE of document #000188-000190,
above, inadvertently not marked duplicate.
Exemption 5 and Exemption
8.
Withheld in
Full
3
above, inadvertently not marked duplicate.
8.
Withheld in
Full
3
000214 August 8, 2008 continuation of email
#000206, above regarding new expectations
and guidance on tri-party repo. The email
chain provides comments from Patrick
Parkinson, Christopher Laursen and Norah
Barger.
000036-38 above.
Redacted 1
000216 DUPLICATE of email #000039, inadvertently
000218-000221 DUPLICATE of email #000041-000044,
inadvertently not marked as duplicate.
inadvertently not marked as duplicate.
Internal deliberations. Exemption 5. Withheld in
Full
7
Page 37 of 106
Material
Full or
Redacted
number
of pages
Full
2
Supervisory information. Exemption 8. Redacted 3
Pages # 000134-35 were inadvertantly not
redacted.
8.
Withheld in
Full
3
000256 Spreadsheet entitled, "Global Over/Under
Funding Summary as of September 5, 2008,"
is attached to a September 9, 2008 email
from Lucinda Brickler to various FRBNY staff.
Supervisory information. Exemption 4. See Bates 105-
110 above.
110 above.
Withheld in
Full
1
000257 September 9, 2008 email from Melissa
Vanlandingham (Board Analyst) to Jeff
Stehm (RBOPS) asking whether she should
make changes to a spreadsheet.
000036-38 above.
Redacted 1
000261 August 20, 2008 email from Brandon Hall
(FRBNY) to various FRBNY staff, providing
counterparty credit exposures to Lehman
Brothers, as evidenced by LFIs' most
updated top financial counterparty exposure
lists.
000105-110 above.
000105-110 above.
Redacted 1
Page 38 of 106
Material
Full or
Redacted
number
of pages
000263 Spreadsheet entitled, "Trend of
Counterparty Credit Risk Exposures to
Lehman Brothers (March 2008 Most
Recent Data)." This spreadsheet is attached
to email #000261 above.
000105-110 above.
000105-110 above.
Withheld in
Full
1
000288-000289 September 9, 2008 email from Melissa
Vanlandingham to Jeff Stehm sending the
spreadsheet below (#000290-000319) and
providing comments and instructions.
Document has been
provided in unredacted
form to the requester.
000290-000319 Spreadsheet that lists major financial groups,
their memberships, and other
major activities entitled, "Selected Affiliated
Members of Payments and Settlement
Systems." This document is attached to
email #000288-000289, above.
Document has been
No exemption claimed. Withheld in
Full
30
Page 39 of 106
Material
Full or
Redacted
number
of pages
000320-000322 September 9, 2008 email from Theodore
Lubke to various FRBNY staff regarding
Lehman's worlwide involvement in
exchanges and clearing houses.
Board or its delegee, the
FRBNY, from Board-
regulated financial
institutions that participate
in clearing, payment and
settlement systems and that
made/received payments or
settled transactions on
behalf of Lehman worldwide.
This information was
provided on a mandatory
basis by the financial
institutions as a result of the
Board's supervisory
authority. Disclosure is likely
to cause substantial
financial institutions that
provided the information or
their customers.
Redacted 3
Page 40 of 106
Material
Full or
Redacted
number
of pages
000320-322 con't In the alternative, disclosure
is likely to impair the Board's
future by diminishing the
quality or reliability of
information.
Exemption 8. This
information was obtained by
the Board, or its delegee, the
FRBNY, as a result of its
oversight authority over
financial institutions. The
information was obtained to
assess the risks to financial
institutions or the clearing,
payment and settlement
system from a possible
Lehman bankruptcy.
Page 41 of 106
Material
Full or
Redacted
number
of pages
agency (the Board)
responsible for the
000323-000335 Spreadsheet entitled, "Horizontal Exchange
Memberships 5-8 final," which provides the
Exchanges with which Lehman Brothers
participated. This spreadsheet is attached to
email #000320-000322, above.
000320-22 above.
000320-22 above.
Withheld in
Full
13
Page 42 of 106
Material
Full or
Redacted
number
of pages
000336-000341 Spreadsheet which provides an updated
analysis on Lehman, showing those
exchanges where the average value in excess
of $1 Billion daily, entitled, "Main Exchange
CLS Lehman 9-9 sorted." This spreadsheet is
Exemption 4. This
document contains
regarding Lehman's foreign
operations supplied
voluntarily by foreign bank
supervisory agencies or
foreign central banks, who
are "persons" under FOIA,
which the supervisors or
banks do not customarily
disclose to the public.
Alternatively, disclosure
Board's ability to obtain
future as foreign bank
supervisory agencies would
be unlikely to provide
that information would be
disclosed to the public.
not assert exemption 8 for
this document.
Withheld in
Full
6
Page 43 of 106
Material
Full or
Redacted
number
of pages
000344 September 10, 2008 email exchange
between Patrick Parkinson and William
Brodows and copying various FRBNY staff
regarding information on exposures to
Lehman OTC derivatives.
000010-11 above.
Redacted 1
(Redacted portion only is a duplicate).
8.
Redacted 2
000347 DUPLCIATE OF email #000263, inadvertently
8.
Withheld in
Full
1
000349-000353 Spreadsheet which provides counterparties'
exposure to Lehman. This document is
attached to a September 10, 2008 email
from Amy White (FRBNY) to Patrick
Parkinson and copying various FRBNY staff.
000105-110 above.
000105-110 above.
Withheld in
Full
5
000354-000355 September 10, 2008 continuation of email
#000320-000322, above regarding Lehman's
worldwide involvement in exchanges and
clearing houses. Arthur Angulo forwards
email #000320-000322 to Patrick Parkinson
and both Parkinson and Theodore Lubke
provide comments.
000320-22 above.
000320-22 above.
Redacted 2
Page 44 of 106
Material
Full or
Redacted
number
of pages
000356-000358 September 10, 2008 email from Brandon
Hall to Alan Michael (Federal Reserve Bank
of Richmond) and Brad Evans (Federal
Reserve Bank of Richmond) regarding BAC
CCR exposure to Lehman.
000105-110 above.
000105-110 above.
Redacted 3
between Eric Rosengren (Federal Reserve
Bank of Boston), Chairman Bernanke, The
Board of Governors and FRBNY President
Geithner regarding Lehman exposures at a
certain financial institutions.
confidential market source
email address.
00009 above.
000002 above.
Redacted 1
000360 September 10, 2008 email from Mark
VanDerWeide to Scott Alvarez, Patrick
Parkinson, and Brian Madigan regarding
various clearing utilities' exposure to
Lehman.
000320-22 above.
000320-22 above.
Redacted 1
000362 Spreadsheet entitled, "LEH tri-party haircuts
8Sept2008," which provides calculations
relating to a proposed change in haircuts
applied to Lehman collateral. This
spreadsheet is attached to a September 10,
2008 email from Til Schuermann to Meg
McConnell.
Calculations regarding an
internally proposed
change.
000010-11 above.
Redacted 1
000363-000364 September 10, 2008 email from an outside
analyst to Patrick Parkinson providing an
analysis of Lehman's Liquidity Cushion.
outside analyst.
00009 above.
Redacted 2
Page 45 of 106
Material
Full or
Redacted
number
of pages
000366-000367 September 10, 2008 email from Albert
Alvarado (FRBNY) to various FRBNY staff
providing information on Lehman balances.
Jeanmarie Davis (FRBNY) responds with an
update on the three day rolling obligations
into DTCC.
110 above.
110 above.
Redacted 2
000368-000369 September 10, 2008 email from Jeremy
Gagne (FRBNY) to Jeanmarie Davis providing
Lehman's preliminary settlement values in
each currency at CLS Bank for Thursday,
Sept. 11, Lehman's net position by currency
projected for September 11 and Lehman's
net position across all currencies (USD
equivalent) since July 1, 2008.
000320-22 above.
000320-22 above.
Redacted 2
VanDerWeide to Scott Alvarez discussing
three options for Lehman.
000036-38 above.
Redacted 1
Brickler to various FRBNY staff entitled, "Re:
restricted fr--JPMC unwind cheat sheet,"
sending and commenting on the
attachments discussed below (#000376-
000378 and #000379-000382). Patrick
Parkinson forwards the e-mail to Brian
Madigan and Scott Alvarez, with additional
comments.
000036-38 above (top of
#000374).
000010-11 above (bottom of
#000374-375).
Redacted 2
Page 46 of 106
Material
Full or
Redacted
number
of pages
000376-000378 Document entitled, "JPMC Unwind
Cheat Sheet," and headed, "Restricted F.R.,"
provides Objective & Rationale, Preferred
Outcome and Issues in regards to JPMC
unwinding Lehman's triparty. This document
is attached to email #000374-000375,
above.
communication, and
#000379-382 below, discuss
options in the event that
JPMC is reluctant to unwind
Lehman's tri-party repo
transactions. The document
automatically redated when
accessed for FOIA purposes,
and was originally dated on
or before the date of the e-
mail.
Withheld in
Full
3
000379-000382 Document entitled, "Contingency Planning
Loss of Confidence in Major Securities
Dealer," and headed, "Restricted F.R."
provides alternatives in the event JPMC is
reluctant to unwind Lehman's triparty. This
document is attached to email #000374-
000375, above.
000376-378 above. The
document automatically
redated when accessed for
FOIA purposes, and was
originally dated on or before
the date of the e-mail.
Withheld in
Full
4
000384 September 10, 2008 continuation of Lucinda
Brickler's email #000374-000375 entitled,
"Re: restricted fr--JPMC unwind cheat
sheet," above. Here, Brickler reports on a
conversation with JPMC, a regulated
000105-110 above.
000105-110 above.
Redacted 1
Page 47 of 106
Material
Full or
Redacted
number
of pages
000390 September 10, 2008 email from Eric
Rosengren to Chairman Bernanke, the Board
of Governors and FRBNY President Geithner
regarding a particular firm's exposure to
Lehman.
Identifying information of a
confidential market source
email address.
000009 above.
000002 above.
Redacted 1
000406-000407 September 10, 2008 email from Ryan
O'Connell (Citibank) to Undisclosed
Recipients providing an assessment of
Lehman.
information.
regarding Lehman obtained
by the Board or FRBNY from
a third party provider (Citi)
under a contract that
requires the Board or FRBNY
to maintain confidentiality.
The information was
voluntarily provided and
would not customarily be
disclosed to the public by the
provider. In the alternative,
disclosure likely would
impair the Board/FRBNY's
future.
Redacted 2
Page 48 of 106
Material
Full or
Redacted
number
of pages
000408-000414 September 10, 2008 article from Citibank
entitled, "Lehman-Under the Gun," provides
an assessment of Lehman. This document is
information.
000406-07 above.
Withheld in
Full
7
000416-000420 Document providing a Liquidation
Consortium game plan for Lehman. This
document is attached to a September 10,
2008 email from Michael Nelson (FRBNY
Attorney) to various Board and FRBNY staff .
Internal analysis. Exemption 5. See Bates
decisional, draft memo
circulated among Board and
FRBNY staff outlines the
possibility, and discusses
pros and cons, of convening
a consortium of major banks
to explore the possibility of
providing liquidity to Lehman
to avert a bankruptcy filing.
Withheld in
Full
5
"Bankruptcy Analysis - Summary," and
headed, "Confidential," starts to prioritize
and provide more direction for continued
work on Lehman. This document is attached
to a September 11, 2008 email from
Theodore Lubke to various Board, FRBNY
and SEC staff.
communication among
Board, FRBNY and SEC staff,
and #000425-428 below,
identifies and discusses risks
of a Lehman bankruptcy that
may warrant action by
regulators and discusses
means of mitigating these
risks.
Withheld in
Full
3
Page 49 of 106
Material
Full or
Redacted
number
of pages
000425-000428 Document outlining a Board/FRBNY meeting
regarding Lehman. This document is
from Theodore Lubke to various Board,
FRBNY and SEC staff.
000422-424 above.
Withheld in
Full
4
000430-000432 Draft timeline for Lehman's Liquidation
Consortium. This document is attached to a
September 11, 2008 email from Michael
Nelson to various FRBNY staff.
000416-420 above.
Withheld in
Full
3
000434-000436 September 11, 2008 email from Jeffrey
Levine (FRBNY) to FRBNY's CPC Updates
email group. This email, marked, "Strictly
Confidential - F.R. Material," provides
highlights from a meeting with JPMC's
Treasury.
000105-110 above.
000105-110 above.
Redacted 3
000439 September 11, 2008 email from Brian
Begalle to various FRBNY staff headed,
"Restricted FR," provides a summary of
Lehman's triparty.
000105-110 above.
000105-110 above.
Redacted 1
000442-000443 September 11, 2008 spreadsheet providing
an analysis of Lehman's triparty collateral is
000105-110 above.
000105-110 above.
Redacted 2
Page 50 of 106
Material
Full or
Redacted
number
of pages
000446-000448 Select pages of a September 10, 2008
document providing spreadsheets of "Total
Daily Sides Processed," "Total Daily Shares
Processed," and "Total Dailey Value
Processed (In Dollars)," attached to a
September 11, 2008 email from William
Carlucci (FRBNY) to various FRBNY staff
regarding DTCC Data as of 9-11.
000105-110 above.
000105-110 above.
Withheld in
Full
3
000449-000470 Spreadsheet entitled, "GCF Inter-Bank
Position," provides updated general
collateral finance numbers obtained from
regulated financial institutions. This
spreadsheet is attached to a September 11,
2008 email from William Carlucci to various
FRBNY staff regarding DTCC Data as of 9-11.
000105-110 above.
000105-110 above.
Withheld in
Full
22
000471-000474 Intranet screenshots of Fixed Income
Clearing Corporation (FICC) data from
September 11, 2008. This document is
from William Carlucci, a FRBNY senior bank
examiner, to various FRBNY staff regarding
DTCC Data as of 9-11.
000105-110 above.
000105-110 above.
Withheld in
Full
4
000475 September 11, 2008 email from Theodore
Lubke to Patrick Parkinson scheduling a call
to discuss Lehman.
000010-11 above.
Redacted 1
Page 51 of 106
Material
Full or
Redacted
number
of pages
000477 September 11, 2008 email from Catherine
Tilford (BS&R) to Coryann Stefansson and
Pat Soriano (BS&R) regarding information
from a regulated financial institution.
000105-110 above.
000105-110 above.
Redacted 1
000478 September 11, 2008 email from David
Skidmore (Office of Board Members) to
Chairman Bernanke regarding Lehman stock
prices.
address.
000002 above.
Redacted 1
000480-000484 September 11, 2008 email from Malcolm
Britton (RBOPS ) to Holly Kirkpatrick
(RBOPS), sending information obtained from
an FRB regarding Lehman Bros. Bank FSB and
Lehman Bros. Commercial Bank intra-day
credit (daylight overdraft) at an FRB.
this document.
Redacted 5
Page 52 of 106
Material
Full or
Redacted
number
of pages
000480-484 Con't Exemption 8. This document
obtained by the Board from
an FRB regarding the FRB's
exposure to Lehman
Brothers Bank FSB or
Lehman Brothers
Commercial Bank through a
daylight overdraft. The
Board obtained the
information in its capacity as
regulator and supervisor of
the FRBs to ensure that
there was not undue risk to
the FRB in the event
Lehman Brothers Bank FSB
was unable to repay its
daylight overdraft.
000485 Daylight Overdraft Report for Lehman
Brothers Bank FSB which is attached to email
#000480-000484, above.
Supervisory information. Exemption 4. The Board will
this document.
000480-484 above.
Withheld in
Full
1
Page 53 of 106
Material
Full or
Redacted
number
of pages
Brothers Commercial Bank, which is
Supervisory information. Exemption 4. The Board will
this document.
document contains similar
regarding Lehman Bros.
Commercial Bank.
Withheld in
Full
1
000487-000489 September 11, 2008 email from Moses
Cheng (FRBNY Examiner) to FRBNY's CPC
Updates email group and various Board and
FRBNY staff regarding September 11, 2008
Deutsche Bank Credit Risk Update. This
email, marked, "Restricted FR," provides
Deutche Bank's credit exposure to Lehman.
000105-110 above.
000105-110 above.
Redacted 3
000490 September 11, 2008 email from Jeff Stehm
to Jeanmarie Davis entitled, "LB Foreign
Clearing Systems," which provides a partial
listing of Lehman Brothers participations.
The "website" referenced in the email is not
public, but a proprietary management
information system to which RBOPS has
access through its oversight authority.
Document has been
Page 54 of 106
Material
Full or
Redacted
number
of pages
Brothers Commercial Bank and Lehman
Brothers Bank FSB with attribute data,
including cap class, asset, collateral, and
overdrafting information. This document is
from Holly Kirkpatrick to Jeffrey Marquardt
(RBOPS) and Jeff Stehm. (DUPLICATE of
#000485, inadvertently not marked as
duplicate).
Full
1
Brothers BK FSB with attribute data,
including cap class, asset, collateral, and
overdrafting information which is attached
to a September 11, 2008 email from Holly
Kirkpatrick to Jeffrey Marquardt (RBOPS) and
Jeff Stehm. (DUPLICATE of #000486,
inadvertently not marked as duplicate).
Full
1
000496 Spreadsheet entitled, "Lehman DI
attributes," which is attached to a
September 11, 2008 email from Holly
Kirkpatrick to Jeffrey Marquardt and Jeff
Stehm.
this information.
000480-484 above.
Withheld in
Full
1
000499-000500 Spreadsheet of Bilateral Activity for Lehman
Bros. BK FSB for the week of Sept. 2, 2008
from Joshua Mazen (RBOPS) to Jeff Stehm.
this information.
000480-484 above.
Withheld in
Full
2
Page 55 of 106
Material
Full or
Redacted
number
of pages
000503-000504 Duplicate of #000499-000500, inadvertently
8.
Withheld in
Full
2
000505 September 11, 2008 email from James
Embersit (BS&R) to Deborah Bailey regarding
Lehman market impacts.
000036-38 above.
Redacted 1
000507-000508 Document entitled, "Lehman Default
Management Group," for a meeting with
Lehman counterparties and creditors in the
event of a Lehman bankruptcy. This
2008 email from Jamie McAndrews to Tobias
Adrian (FRBNY).
information and Internal
analysis.
this document.
000010-11 above.
Withheld in
Full
2
000510-000511 September 11, 2008 email from Chris Haley
(Federal Reserve Bank of Boston) to various
FRB staff regarding State Street's Lehman
exposure.
000105-110 above.
000105-110 above.
Redacted 2
000515 Spreadsheet entitled OTC Derivative
Descriptive Data. This spreadsheet is
from Clinton Lively (FRBNY) to various FRBNY
staff and forwarded to Patrick Parkinson.
communication, and
#000516-518 below,
circulates to Board staff
drafts of documents that
may be utilized by FRBNY
staff in managing issues
related to Lehman's OTC
derivatives portfolio.
Withheld in
Full
1
Page 56 of 106
Material
Full or
Redacted
number
of pages
000516-000518 Document entitled, "LEH OTC Derivatives,"
which outlines options for Lehman. This
2008 email from Clinton Lively to various
FRBNY staff.
000515 above.
Withheld in
Full
3
000520-000521 Document entitled, "Operational Feasibility
for Mass Novation of LEH OTC positions."
This document is attached to a September
11, 2008 email from Ada Li (FRBNY) to
Patrick Parkinson.
000010-11 above.
Withheld in
Full
2
000524-000577 Document providing data received from CLS
for Friday 9/12 settlement and marked,
"Confidential." This document is attached to
a September 11, 2008 email from Jeremy
Gagne to various Board and FRBNY staff.
000320-22 above.
000320-22 above.
Withheld in
Full
54
000578-000579 September 11, 2008 email from Caroline
Frawley (FRBNY) to various FRBNY staff
regarding UBS's posture toward Lehman.
000105-110 above.
000105-110 above.
Redacted 2
000580-000581 September 11, 2008 email from Thomas
Baxter (FRBNY General Counsel) to Scott
Alvarez and Mark VanDerWeide regarding
staffing and FRBNY's retention of Cleary to
consult with Board and FRBNY on Lehman
matters.
000010-11 above.
Redacted 2
Page 57 of 106
Material
Full or
Redacted
number
of pages
"Convening the FRBNYs Operations
Management Group OMG to consider
potential collective actions in the event of a
default by Lehman." This document is
from Jamie McAndrews to Patrick Parkinson
and Jeff Stehm.
000010-11 above.
Withheld in
Full
2
000585-000586 September 11, 2008 email from Brian
Begalle to various FRBNY staff providing an
update on BNYM's Securities Lending
Program regarding Lehman.
000105-110 above.
000105-110 above.
Redacted 2
000587-000589 September 11, 2008 email from Cynthia
Graves (FRBNY) to various FRBNY staff
headed, "Restricted F.R." This document
provides a September 10, 2008 liquidity
funding update from BNPP.
000105-110 above.
000105-110 above.
Withheld in
Full
3
000590 September 11, 2008 email from Brian
Begalle to various FRBNY staff entitled, "FYI:
Lehman Afternoon Update from
BNYM team re sec lending."
000105-110 above.
000105-110 above.
Redacted 1
000591 September 11, 2008 email from Marsha
Takagi (FRBNY) to various Board and FRBNY
staff regarding Lehman's clearing entities.
Document has been
Page 58 of 106
Material
Full or
Redacted
number
of pages
000593 Document entitled, "LEH OTC Derivatives," is
an updated version of document #000515.
11, 2008 email from Clinton Lively to various
FRBNY staff.
000515 above.
Withheld in
Full
1
000594-000597 Document entitled, "LEH OTC Derivatives" is
an updated draft of document #000516-
000519. This document is attached to a
September 11, 2008 email from Clinton
Lively to various FRBNY staff.
000515 above.
Withheld in
Full
4
000600-000601 September 11, 2008 email from Moses
Cheng to FRBNY's CPC Updates email group
and various Board and FRBNY staff regarding
September 3, 2008 Deutsche Bank Credit
Risk Update.
000105-110 above.
000105-110 above.
Withheld in
Full
2
Marshall to various Federal Reserve Bank of
Chicago staff regarding Lehman prime
brokerage customers looking to transfer
accounts.
000336-341 above.
(Information in this
document was voluntarily
supplied by the Chicago
Merchantile Exchange (CME)
not assert exemption 8 for
this document.
Redacted 1
Page 59 of 106
Material
Full or
Redacted
number
of pages
Takagi to Jeffrey Marquardt and Jeff Stehm
suggesting draft of text to include in
communication plan with CLS overseers for
the communications strategy memo.
000010-11 above.
Redacted 1
000607 Deborah Bailey forwarding email #000510,
above to Chairman Bernanke and Governor
Kohn with additional information.
email address.
000105-110 above.
000002 above.
000105-110 above.
Redacted 1
000609-000615 Draft timeline of significant events prepared
in anticipation of Board/FRBNY conference
call re Lehman. This document is attached
to a September 11, 2008 email from Ann
Miner (FRBNY) to various Board and FRBNY
staff
and draft internal timeline.
Exemption 4. The Board wil
not claim Exemption 4.
000010-11 above.
Withheld in
Full
7
000616-000617 September 11, 2008 email from Marsha
Takagi to various Board and FRBNY staff
suggesting text on the communication plan
with CLS overseers for the communications
strategy memo.
000010-11 above.
Redacted 2
to various FRBNY staff providing Board
comments to draft Lehman timeline.
000010-11 above.
Redacted 1
000619-000621 Draft timeline for Lehman. This document is
000010-11 above.
Withheld in
Full
3
Page 60 of 106
Material
Full or
Redacted
number
of pages
000624-000630 September 11, 208 draft memorandum from
Daniel Muccia (FRBNY) to Theodore Lubke
regarding a communication plan for keeping
domestic and foreign supervisors informed
of developments relating to Lehman. This
2008 email from Daniel Muccia to Theodore
Lubke. The draft was circulated to Board
and SEC staff.
000010-11 and 000041-44
above.
Withheld in
Full
7
#000608, above, regarding Lehman prime
brokerage customers looking to transfer
accounts. Here, Patricia Mosser responds to
various FRBNY staff and Board staff about
contingency planning.
000010-11 above.
Redacted 1
000632 September 11, 2008 email between various
FRBNY staff and Board staff regarding
reverse exposure for Lehman.
000010-11 above.
Redacted 1
000633 September 11, 2008 email from Lucinda
Brickler to Theodore Lubke, forwarded to
Ann Miner and SEC staff, sending
documents: (1) a "survival" binder in the
event of insolvency and (2) a checklist of
things to be thinking about.
000010-11 above.
Redacted 1
Page 61 of 106
Material
Full or
Redacted
number
of pages
000634-000668 Document entitled, "FRB contingency
survival binder," and headed, "Restricted
F.R." is a worst case scenarios survival
binder. This document is attached to email
#000633, above.
Internal practices and
Internal deliberations.
this document.
Exemption 5. This internal,
predecisional survival binder
outlines actions which could
be taken by Board or FRB
personnel to safeguard the
U.S. financial system in
response to certain crisis
scenarios such as a terrorist
attack, stock market crash or
sudden insolvency of a major
non-financial institution.
FRBNY and SEC staff advising
the Board on the response to
the Lehman crisis reviewed
portions of the binder
relating to insolvency of a
major non-financial
institution on or around
Sept. 11, 2008 in considering
possible responses to the
Lehman crisis.
Withheld in
Full
35
Page 62 of 106
Material
Full or
Redacted
number
of pages
000634-668 con't Disclosure of
one would chill inter- and
intra-agency
communications. Portions of
the manual relating to
insolvency of a major non-
financial institution (#000649-
650 and #000665-68) are
responsive. The remainder
of the document (#000634-
648 and #000651-664) is non-
responsive, and
inadvertently not marked
non-responsive.
000719-000720 Sept. 11, 2008 email from Todd
Waszkelewicz (FRBNY) to various FRBNY staff
providing minutes from CLS Discussion on
Event Scenarios
000320-22 above.
000320-22 above.
Redacted 2
000721-000724 September 11, 2008 memorandum entitled
"CLS Discussion of event Scenarios" and
headed "Restricted FR" discussing
information from a regulated financial
institution re: Lehman default scenarios.
This document is attached to e-mail #000719-
000720 above.
000320-22 above.
000320-22 above.
Redacted 2
Page 63 of 106
Material
Full or
Redacted
number
of pages
000726 September 12, 2008 email from Matthew
Eichner (SEC) to various SEC staff regarding
LEH View from UK.
information.
Exemption 4. This
document contains
confidential commerical or
regarding Lehman's foreign
operations supplied
voluntarily by foreign bank
supervisory agencies, who
are "persons" under FOIA,
which the supervisors do not
public. Alternatively,
disclosure of this information
Board's ability to obtain
future as foreign bank
supervisory agencies would
be unlikely to provide
that it would be disclosed to
the public.
Redacted 1
Page 64 of 106
Material
Full or
Redacted
number
of pages
000726 con't Exemption 5 (not marked on
document) See Bates
among Board staff, Board
members and SEC staff
concerns Lehman's situation
in markets overseas.
Disclosure would have a
chilling effect on inter-
agency communications.
000727-000728
September 12, 2008 continuation of email
#000618 providing Board comments to
Lehman timeline. In this email, Theodore
Lubke gives timeline edits to various Board
and FRBNY staff
000010-11 above.
Redacted 2
000729 September 12, 2008 email from Scott
Alvarez to Governor Kroszner regarding the
potential need for upcoming Board
meetings.
000068 above.
Redacted 1
000730-000731 September 12, 2008 email from Patrick
Parkinson to Chairman Bernanke and
Governor Kohn regarding JPMC unwinding.
address.
000002 above.
Redacted 2
#000727-000728 providing Board comments
to Lehman timeline. In this email, Lisa
Joniaux (FRBNY) adds a date for the timeline.
000320-22 above.
000320-22 above.
Redacted 2
Page 65 of 106
Material
Full or
Redacted
number
of pages
000734-000736 Draft timeline for Lehman. This document is
000010-11 above.
Withheld in
Full
3
Brickler to Patrick Parkinson regarding tri
party repo thoughts.
000010-11.
Redacted 2
Page 66 of 106
Material
Full or
Redacted
number
of pages
000739-000742 September 11-12, 2008 email exchange
between James Bromley (Cleary Attorney)
and Mark VanDerWeide regarding Project
Adam.
Internal deliberations. Exemption 5. This pre-
between a Board attorney
and a Cleary Gottlieb
attorney, hired to act as a
consultant to Board and
FRBNY on legal matters,
seeks legal advice relating to
the Lehman situation. The
communication played a part
in the Board's overall
decision-making process in
responding to the Lehman
crisis, and disclosure of such
communications would chill
intra-agency
communications. In
addition, the e-mail contains
confidential communications
between a Board attorney
and an outside attorney
hired as a consultant
requesting and giving legal
advice and is protected by
attorney-client privilege.
Redacted 4
000743-000746 Draft Lehman timeline attached to
September 12, 2008 email from Ann Miner
to various Board, FRBNY and SEC staff
draft document.
000010-11 above.
Redacted 4
Page 67 of 106
Material
Full or
Redacted
number
of pages
000747 September 12, 2008 email from William
Carlucci to various FRBNY staff providing
DTCC Data - Lehman's Commercial Paper
and GCF Repo for 9/12.
000105-110 above.
000105-110 above.
Redacted 1
default by Lehman." This attachment to a
September 11, 2008 email from Jamie
McAndrews to Patrick Parkinson and Jeff
Stehm is an updated version of document
#000583-000584, above.
000010-11 above.
Withheld in
Full
4
VanDerWeide to Patrick Parkinson regarding
advice from outside bankruptcy counsel.
000739-42 above.
Redacted 1
Page 68 of 106
Material
Full or
Redacted
number
of pages
000756-000757 September 12, 2008 email exchange
between various SEC staff regarding Lehman
view from UK.
deliberations.
000726 above.
among Board staff, Board
members and SEC staff
concerns Lehman's situation
in markets overseas.
Disclosure would have a
chilling effect on inter-
Redacted 2
000760-000764 September 11, 2008 Lehman document
entitled, "Payment and Settlement Systems
Timeline," and headed, "Restricted FR." This
document attached to a September 12, 2008
email from Steven Pesek (FRBNY) to
Theodore Lubke is provided for an upcoming
discussion on Lehman involving FRBNY,
Board and SEC staff.
Internal strategy. Exemption 5. See Bates
000010-11 and 000422-24
above. This pre-decisional,
internal timeline was
circulated among FRBNY,
Board and SEC staff in
anticipation of an upcoming
conference call on Lehman.
Withheld in
Full
5
000766-000769 Document entitled, "Decision to File
Bankruptcy," discusses a Lehman
bankruptcy. This attachment to a
September 12, 2008 email from Lily Tham
(FRBNY) to Theodore Lubke and copying
various FRBNY and Board staff, is marked,
"Highly Confidential."
000010-11 above.
Withheld in
Full
4
Page 69 of 106
Material
Full or
Redacted
number
of pages
Lubke to Daniel Muccia and Marsha Takagi
and copying Lily Tham providing comments
on the attached memo on communication
plans.
draft document.
000010-11 above.
Redacted 2
000774-000783 September 11, 2008 memorandum
regarding communication plans for relaying
information on Lehman developments. This
memorandum, attached to email #000771-
000773, above is headed, "Restricted F.R."
Draft document of internal
deliberations.
000010-11 above.
Withheld in
Full
8
#000732-000733, above entitled, "Board
comments Timeline - Generic and
Weekend." Here, Jennifer Lucier (RBOPS)
provides a clarification for the timeline.
000320-22 above.
000320-22 above.
Redacted 1
potential actions in the event of a default by
Lehman." This attachment to a September
12, 2008 email from Jamie McAndrews to
Patrick Parkinson, is an updated version of
#000751-000754, above.
000010-11 above.
Withheld in
Full
4
000790-000791 September 10-11, 2008 emails from Patrick
Dwyer (FRBNY) to various FRBNY staff
regarding money funds' exposure to
Lehman.
Identifying information of a
particular money fund.
000009 above.
Redacted 2
Page 70 of 106
Material
Full or
Redacted
number
of pages
VanDerWeide to Scott Alvarez regarding
FRBNY options for Lehman.
000036-38 above.
Redacted 1
000793-000794 Document entitled, "LEH Derivatives Close
Out," provides a proposal and considerations
for the orderly unwind of Lehman's
derivative positions. This document is
000036-38 above.
Withheld in
Full
2
000799 Eric Rosengren forwards email #000510-
000511, above, regarding State Street's
Lehman exposure to The Board of
Governors, FRBNY President Geithner and
Rita Proctor (Chairman Bernanke's
Assistant). Proctor then forwards the email
on to Chairman Bernanke.
email address.
000105-110 above.
000002 above.
000105-110 above.
Redacted 1
000800-000801 September 12, 2008 email from Albert
Alvarado to various Board and FRBNY staff
regarding Lehman balances. Includes
information re Lehman exposures of a
number of regulated LFIs.
000105-110 above.
000105-110 above.
Redacted 2
000802-000803 September 12, 2008 email from James Wall
(FRBNY) to Brian Begalle conveying
information obtained from a regulated LFI
(Bank of New York Mellon) regarding
discussion with Lehman. Brian Begalle
responds to various FRBNY staff providing a
summary of Lehman's tri party book from
September 11, 2008.
000105-110 above.
000105-110 above.
Redacted 2
Page 71 of 106
Material
Full or
Redacted
number
of pages
000806-000807 September 12, 2008 spreadsheet entitled,
"Triparty Collateral Analysis," which provides
details on Lehman's situation. This
spreadsheet is attached to email #000802-
000803, above.
000105-110 above.
000105-110 above.
Redacted 2
000810-000813 September 11, 2008 email from Diane
Dobbeck (FRBNY) to various Board and
FRBNY staff regarding Large Financial
Institution Counterparty Credit Risk
Exposure to Lehman. Brandon Hall responds
with comments and revisions.
000105-110 above.
000105-110 above.
Redacted 4
000815 September 12, 2008 email from Peter Drake
(FRBNY) to various FRBNY staff regarding
Credit Suisse counterparty exposures.
000105-110 above.
000105-110 above.
Redacted 1
Page 72 of 106
Material
Full or
Redacted
number
of pages
000817 September 12, 2008 email from Chairman
Bernanke to Governors Kohn and Warsh
regarding briefing Reserve Banks' presidents
on Lehman.
address.
members of the Board
discussing procedures,
expressing opinions and/or
weighing options regarding
possible actions to be take in
response to Lehman's
Disclosure of
on intra-agency
communications.
000002 above.
Redacted 1
000818-000820 September 12, 2008 email from Jeremy
Gagne to various Board and FRBNY staff
regarding Lehman Projected CLS Activity for
Sept 15, 2008. This email is headed,
"Restricted FR."
000320-22 above.
000320-22 above.
Redacted 3
Page 73 of 106
Material
Full or
Redacted
number
of pages
000822-000868 Document received from CLS provides
projected settlement and funding activity
data for September 15, 2008. This
2008 email from Che Sidanius (FRBNY) to
various Board and FRBNY staff.
000320-22 above.
000320-22 above.
Withheld in
Full
47
#000817, above, regarding briefing Reserve
Banks' presidents on Lehman. Governor
Kohn responds with reports of various
parties' reactions to the Lehman briefing.
address.
000817 above.
000002 above.
Redacted 1
#000871, above, regarding briefing Reserve
Banks' presidents on Lehman. Chairman
Bernanke responds to Governor Kohn with a
list of people who have not been briefed on
Lehman.
address.
000817 above.
000002 above.
Redacted 1
Stefansson to various Reserve Banks' staff
regarding work on Lehman analysis.
000036-38 above.
Redacted 1
#000871, above regarding briefing Reserve
Banks' presidents on Lehman. Chairman
Bernanke responds to Governor Kohn and
Governor Warsh, asking whom Governor
Warsh has contacted.
address.
000817 above.
000002 above.
Redacted 1
Page 74 of 106
Material
Full or
Redacted
number
of pages
000876-000880 Timeline for Lehman as of September 12,
2008. This document is attached to a
to various SEC and FRBNY staff.
000010-11 and 000422-24
above.
Withheld in
Full
5
#000874, above regarding briefings on
Lehman. Governor Kohn responds with
people he believes Governor Warsh has
called.
address.
000817 above.
000002 above.
Redacted 1
000883-000884 September 12, 2008 email from Sophia
Allison (Board Attorney) to James Bromley
(Cleary Attorney) asking questions about
bankruptcy law.
Internal analysis. Exemption 5. See Bates 739-
42 above.
Redacted 2
Alvarez to Chairman Bernanke and Governor
Kohn, seeking comments on the Speaking
Notes for a Financial Community Meeting,
attached.
address.
000002 above.
Redacted 1
Page 75 of 106
Material
Full or
Redacted
number
of pages
000886-000887 Draft speaking notes for a Financial
Community Meeting on resolving the
Lehman issue. This document is attached to
email #000885, above.
000068 above. In this
communication, the Board's
General Counsel provides
members of the Board with a
draft of speaking notes sent
by the FRBNY's General
Counsel, and requests
comments. Disclosure of
effect on intra-agency
communications.
Withheld in
Full
2
000889-000892 September 12, 2008 draft document
providing logistics for the Default
Management Group Meeting. This
2008 email from Abby Wehr (FRBNY) to
various FRBNY and Board staff.
000010-11 above.
Withheld in
Full
4
#000874, above regarding briefings on
Lehman. Governor Warsh responds, listing
the people he has called.
address.
000817 above.
000002 above.
Redacted 1
Page 76 of 106
Material
Full or
Redacted
number
of pages
000895 September 12, 2008 email from Michael Hsu
(SEC) to Til Schuermann regarding meeting
between Lehman and Fed re status of
Lehman. Discusses some information
obtained from regulated LFIs re Lehman
exposure.
communication among
Board, FRBNY and SEC staff
conveys information and
offers views to assist the
Board in responding to
Lehman's capital and
Disclosure of
on inter-agency
deliberations.
000105-110 above.
Redacted 1
000896 DUPLICATE of email on pg. #000493,
inadvertently not marked duplicate. Email
#000493 was inadvertantly not redacted.
8.
Redacted 1
not marked duplicate.
8.
Withheld in
Full
1
8.
Withheld in
Full
1
8.
Withheld in
Full
1
Page 77 of 106
Material
Full or
Redacted
number
of pages
000900-000901 September 12, 2008 email from Chris Burke
(FRBNY) to various FRBNY staff regarding
PDCF borrowings by Lehman.
Supervisory information. Exemption 4. (not marked
000146-54 above.
000146-54 above.
Redacted 2
000902 September 12, 2008 email from Lyle
Kumasaka (MA) to Brian Madigan, James
Clouse, William English, William Nelson
(MA), and Roberto Perli (MA), providing
financial information for Lehman Bros. BK
FSB.
Supervisory information. Exemption 8. This e-mail
contains CAMEL ratings and
capital information regarding
Lehman Bros. Bank FSB, a
federally chartered thrift
institution regulated by the
Office of Thrift Supervision
(OTS). This information is
contained in or related to
examination, operating or
condition reports prepared
by, on behalf of, or for the
use of an agency (the OTS)
responsible for the
Redacted 1
between various Board and FRBNY staff
regarding Barclays exposure to Lehman.
000105-110 above.
000105-110 above.
Redacted 6
Page 78 of 106
Material
Full or
Redacted
number
of pages
000909-000917 September 12, 2008 Lehman Exposure
Profile. This document is attached to email
#000903-000908, above and provides
additional information re Barclays exposure
to Lehman.
000105-110 above.
000105-110 above.
Withheld in
Full
9
Page 79 of 106
Material
Full or
Redacted
number
of pages
000918 September 12, 2008 email from Matthew
Eichner (SEC) to Patrick Parkinson regarding
gathering information on Lehman.
Inter-agency deliberations
and supervisory
information.
communication between
Board and SEC staff
discussed methods for
getting decision makers
Lehman.
discusses information
regarding Lehman Brothers,
a securities broker dealer
regulated by the Securities
Exchange Commission (SEC),
that the SEC could provide to
other regulators. This
information is contained in
or related to examination,
agency (the SEC) responsible
for the regulation or
supervision of a financial
institution (Lehman).
Redacted 1
Page 80 of 106
Material
Full or
Redacted
number
of pages
000919 September 12, 2008 email from Scott Strah
(FRBB) to Chris Haley and copying various
Federal Reserve System staff providing notes
on a call with Royal Bank of Scotland
regarding Lehman.
000105-110 above.
000105-110 above.
Redacted 1
000920-000922 Lehman Exposure Report which is attached
to email #000919, above.
000105-110 above.
000105-110 above.
Withheld in
Full
3
000923 September 12, 2008 emails from Lisa Joniaux
to various Board and FRBNY staff regarding
DTC lower Lehman's debit cap.
000105-110 above.
000105-110 above.
Redacted 1
Brickler to various Board and FRBNY staff
providing thoughts on triparty repo
000010-11 above.
Redacted 1
000926-000929 Document entitled, "Triparty Repo Cheat
Sheet 9/12-9/15," and headed, "Restricted
F.R." This document is attached to email
#000925, above.
000010-11 above.
Withheld in
Full
4
between various Board and Federal Reserve
Bank of Chicago staff regarding Northern
Trust Corporation's exposure to Lehman.
and internal analysis.
000105-110 above.
000010-11 above.
000105-110 above.
Redacted 3
Page 81 of 106
Material
Full or
Redacted
number
of pages
000933-000935 September 11, 2008 Northern Trust
Corporation Supervisory Memorandum
regarding Lehman exposure and related
risks. This document is attached to email
#000933-000935, above.
000105-110 above.
000105-110 above.
Withheld in
Full
3
"Lehman Brothers Activity in Clearing and
Settlement Systems and Current Regulatory
Communications," and headed, "Restricted
FR." This document is attached to a
September 12, 2008 email from Melissa
Vanlandingham to Jeffrey Marquardt.
000320-22 above.
000320-22 above.
Withheld in
Full
5
#000923, above regarding DTC lower
Lehman's debit cap. Here, Jeanmarie Davis
provides additional information.
000105-110 above.
000010-11 above.
000105-110 above.
Redacted 1
000943 September 12, 2008 email from Todd
Waszkelewicz to various Board and FRBNY
staff regarding a discussion with CLS.
000320-22 above.
000010-11 above.
000320-22 above.
Redacted 1
000944-000945 September 12, 2008 minutes that the CLS
supervisory team prepared regarding CLSB
procedures in the event of a default. This
document is attached to email #000943,
above.
000320-22 above.
000320-22 above.
Withheld in
Full
2
Page 82 of 106
Material
Full or
Redacted
number
of pages
000946 September 12, 2008 email from Jeffrey
Marquardt to various Board and FRBNY staff
providing an update on Lehman's clearing
and settlement system activity.
000010-11 above.
Redacted 1
#000925, above, regarding thoughts on
triparty repo. In this email, Patrick Parkinson
responds with some additional comments to
the attached document.
000010-11 above.
Redacted 1
Sheet 9/12-9/15," and headed, "Restricted
F.R." This attachment to email #000947,
above is an updated version of document
#000926-000929.
Internal analysis and draft
document.
000010-11 above. The
document automatically
redated when accessed for
FOIA purposes, and was
originally dated on or before
the date of the e-mail.
Withheld in
Full
4
000953-000958 September 12, 2008 timeline of Lehman
activity. This document is attached to a
to various Board, FRBNY and SEC staff.
000010-11 and 000422-24
above. This communication
among Board, FRBNY and
SEC staff circulates an
updated timeline of
upcoming events regarding
Lehman. Disclosure would
have a chilling effect on inter-
Withheld in
Full
6
Page 83 of 106
Material
Full or
Redacted
number
of pages
Takagi to various Board and FRBNY staff
regarding preparations for a PRC conference
call.
this documnet.
Redacted 1
000959 con't Exemption 5. This
intraagency communication
discusses internal
procedures and preparations
which Board and FRBNY staff
considered invoking in the
event of a Lehman
bankruptcy. Attachments
include a draft and generic
script which could be used in
case of a Lehman bankrutcy
or similar event. Disclosure
of communications such as
this would have a chilling
effect on intra-agency
communications.
000960 A draft customized e-mail for a potential
bankruptcy event. This document is
000959 above.
Withheld in
Full
1
Page 84 of 106
Material
Full or
Redacted
number
of pages
000961-000976 Comprehensive guide to a Payments Risk
Committee Emergency Conference Call. This
document is attached to email #000959,
above.
not claim exemption 2.
000959 above.
Withheld in
Full
16
000977-000982 Generic script and contact info (home/cell)
for the PRC member and other key
payments people at each of the PRC banks,
as well as key contacts at DTCC, CHIPS and
CLS. This document is attached to email
#000959, above.
000959 above.
Withheld in
Full
6
#000947, above regarding thoughts on
triparty repo. Here, Lucinda Brickler
responds with additional comments.
000010-11 above.
Redacted 1
Lubke to James Bromley regarding two notes
Cleary was asked to draft on bankruptcy
issues.
000739 above.
Redacted 1
000987 September 12, 2008 email from Wendy Ng
(FRBNY) to Theodore Lubke requesting
additional information regarding Lehman.
000010-11 above.
Redacted 1
Bernanke to Governor Warsh regarding bids
for Lehman's asset management division.
address.
000817 above.
000002 above.
Redacted 1
000989-000992 September 13, 2008 email from Marsha
Takagi to Jeff Stehm regarding outreach and
communication for CLS.
000010-11 above.
Redacted 4
Page 85 of 106
Material
Full or
Redacted
number
of pages
000994-000996 September 12, 2008 timeline for Lehman
activity. This attachment to a September 13,
2008 email from Ann Miner to various
Board, FRBNY and SEC staff, is an updated
version of document #000953-000958,
above.
000953-958 above.
Withheld in
Full
3
001002-001008 Document entitled, "Lehman Brothers
International Europe Intercompany Secured
Financing - August '08." This document is
from Vincent DiMassimo (Lehman) to
Clinton Lively and Brian Peters (FRBNY).
Supervisory information. Exemption 4 (not marked on
document) See Bates
000146-54 above.
000146-54 above.
Withheld in
Full
7
VanDerWeide to Scott Alvarez regarding OTS
instructions to Lehman FSB.
Internal analysis and
000036-38 above.
000902 above. This
document discusses
obtained from OTS regarding
Lehman Bros. Bank FSB.
Redacted 1
#000984 regarding thoughts on triparty
repo. In this email, Mark VanDerWeide
responds with a few comments/questions.
000010-11 above.
Redacted 1
Page 86 of 106
Material
Full or
Redacted
number
of pages
VanDerWeide to Scott Alvarez and Deborah
Bailey regarding a call with foreign
supervisors on exposure of Lehman's major
foreign subsidiaries.
000726 above.
000036-38 above.
Redacted 1
001013 September 13, 2008 email from Erin Upton
(FRBNY) to various FRBNY and SEC staff,
sending a timeline of meetings on Lehman.
000010-11 and 000422-24
above.
Redacted 1
001014-001016 September 13, 2008 timeline of meetings on
Lehman. This document is attached to email
#001013, above.
000010-11 and 000422-24
above.
Withheld in
Full
3
001017-001018 September 13, 2008 email from Coryann
Stefansson to various Federal Reserve
System supervisory staff regarding
information needed to be gathered from
supervised LFIs re Lehman exposures.
000010-11 above.
000036-38 above.
Redacted 2
001019-001022 Summary of Lehman Brothers Exposures of
State Street, a regulated LFI, as of 7/11/08.
13, 2008 email from Chris Haley to Coryann
Stefansson.
000105-110 above.
000105-110 above.
Withheld in
Full
4
001023 Summary of Lehman Brothers Exposures as
of 6/04/08. This document is attached to a
September 13, 2008 email from Chris Haley
to Coryann Stefansson.
000105-110 above.
000105-110 above.
Withheld in
Full
1
Page 87 of 106
Material
Full or
Redacted
number
of pages
001024-001030 Spreadsheet of State Street and Broker
Dealer Exposures. This document is
from Chris Haley to Coryann Stefansson.
000105-110 above.
000105-110 above.
Withheld in
Full
7
#001012, above regarding a call with foreign
foreign subsidiaries. In this email, Mark
VanDerWeide responds to Scott Alvarez and
Roger Cole, summarizing his call with
Governor Kroszner about the foreign
supervisors call.
000036-38 above.
Redacted 1
between various Board and FRBNY staff
regarding a draft communication to central
banks and international supervisors on
Lehman.
000010-11 above.
Redacted 2
Alvarez to Reginald Brown (Wilmer Hale)
regarding contact information for potential
weekend calls.
address.
000002 above.
Redacted 1
Page 88 of 106
Material
Full or
Redacted
number
of pages
001039 September 13, 2008 email from Lawrence
Sweet (FRBNY) to Sarah Harris (FSA), Sabine
Lautenschlaeger (BAFIN), and Christian
Sigmundt (BAFIN) regarding international
communication on payment, clearing, and
settlements for Lehman.
information.
contains guidance
communicated by
supervisory staff at the
FRBNY, the Board's delegee,
to foreign bank supervisors
disclosing how the FRBNY
will respond to certain issues
that have arisen with regard
to its oversight of the
clearing, payment and
settlement system and
member financial
institutions.
Redacted 1
delegees, the FRBNY)
responsible for the
financial institutions
(participants in the payment
and settlement system).
Page 89 of 106
Material
Full or
Redacted
number
of pages
001040 September 13, 2008 email from Governor
Kroszner to Governor Warsh and copying
Governor Kohn regarding a call with
international regulators on Lehman.
000817 above.
Redacted 1
001041-001042 Continuation of email #000930, above
regarding Northern Trust Corporation's
exposure to Lehman. In these emails,
Coryann Stefansson and Joseph Abdelnour
(Federal Reserve Bank of Chicago) add
information.
000105-110 above.
000105-110 above.
Redacted 2
between Chairman Bernanke and the Board
of Governors regarding a conference call
with NY. Chairman Bernanke then forwards
the discussion to Scott Alvarez seeking
assistance in scheduling topics for the call.
address.
000068 above.
000002 above.
Redacted 1
Kohn to Governor Kroszner regarding
communicating updates on Lehman.
000817 above.
Redacted 1
McCormick (Treasury) to Governor Warsh
requesting a call on Lehman counterparties.
000041-44 above.
Redacted 1
Page 90 of 106
Material
Full or
Redacted
number
of pages
analyst to Theodore Lubke providing a
proposal regarding Lehman. Theodore
Lubke forwards to Patrick Parkinson and
various FRBNY staff with comments.
outside analyst and
internal deliberations.
000009 above.
000010-11 above.
Redacted 2
#001039 regarding international
settlements for Lehman. Sarah Harris
provides contact information for additional
communications and asks a question.
Lawrence Sweet then answers Harris'
question.
information.
000336-341 above.
1039 above.
Redacted 1
001058 Continuation of email #001050 regarding an
outside analyst's proposal on Lehman. In
this email, Patrick Parkinson provides a
comment and a question.
000010-11 above.
Redacted 1
001060-001062 Minutes on September 13, 2008 CLS User
Member Bankruptcy Scenario meeting. This
2008 email from Jeremy Gagne to various
Board and FRBNY staff.
000320-22 above.
000320-22 above.
Withheld in
Full
3
#001043 regarding a conference call with
NY. Scott Alvarez and Chairman Bernanke
provide additional comments about
scheduling the call.
address.
000068 above.
000002 above.
Redacted 1
Page 91 of 106
Material
Full or
Redacted
number
of pages
Lubke to FRBNY staff regarding potential
resource need for Lehman.
000010-11 above.
Redacted 1
#001012 regarding a call with foreign
foreign subsidiaries with comments from
Deborah Bailey and Governor Kroszner.
000068 above.
Redacted 2
001068-001069 September 13, 2008 email from Tim Doar
(CME Group) to Ananda Radhakrishnan
(Commodity Futures Trading Commission
(CFTC)), John Lawton (CFTC), Michael
Walinskas (OCC), Michael Macchiaroli (SEC),
Grace Vogel (FINRA), Robert Colby (SEC)
regarding a conference call on the Lehman
situation.
000041-44 above.
document). See Bates
000004 above.
concerns the exchange of
regarding Lehman among a
number of agencies
responsible for regulating
Lehman or its financial
institution subsidiaries or
affiliates.
Redacted 2
Page 92 of 106
Material
Full or
Redacted
number
of pages
agency or agencies (the SEC,
CFTC, FINRA and/or OCC)
responsible for the
regulation or supervision of a
financial institution (Lehman
or its subsidiaries or
affiliates).
#001065 regarding potential resource need
for Lehman.
000010-11 above.
Redacted 3
001074 September 13, 2008 email from Susan Foley
(RBOPS) to Jeffrey Marquardt regarding the
Federal Reserve Bank of Philadelphia's plans
for the Lehman situation.
this document.
000036-38 above.
000480-484 above.
Redacted 1
001077-001080 Lehman timeline as of September 13, 2008.
13, 2008 email from Ann Miner to various
SEC and FRBNY and Board staff.
000010-11 and 000422-24
above.
Withheld in
Full
4
Page 93 of 106
Material
Full or
Redacted
number
of pages
001081 September 13, 2008 email from William
Rutledge (FRBNY) to Governor Kroszner and
copying Governor Warsh and FRBNY
President Geithner providing impressions
about a call with international regulators.
deliberations.
000726 above.
000092-93 above.
Redacted 1
between Mark VanDerWeide and Scott
Alvarez regarding a potential tri-party
solution for Lehman.
000068 above.
Redacted 1
001085 September 13, 2008 email from Chris
McCurdy to various Board and FRBNY staff
regarding clearing bank margins for Lehman.
000010-11 above.
Redacted 1
001086-001087 September 13, 2008 email from Jeffrey
Mooney (SEC) to William Carlucci (FRBNY)
and Catherine Moore (SEC), forwarded to
Jeff Stehm (Board staff), providing an OCC
call recap.
and Internal deliberations.
000422-24 above.
1068 above.
Redacted 2
001088-001089 September 13, 2008 email from Jeff Stehm
to Governor Kohn and various FRBNY staff
providing an update on LB Clearing and
Settlement Issues.
000320-22 above.
000320-22 above.
Redacted 2
Page 94 of 106
Material
Full or
Redacted
number
of pages
001092 Spreadsheet entitled, "Cash Capital Facilities
and Conduits," shows
the current status of the holding company's
credit facilities (both syndicated and
bilateral), with supervised LFIs. This
2008 email from Christopher Tsuboi (FRBNY)
to various FRBNY staff.
000105-110 above.
Withheld in
Full
1
001093-001094 September 13, 2008 memorandum which
provides Lehman's view on how a default for
their B/D units may trigger
a cascade of defaults through to the subs
which have large OTC derivative books. This
attachment to a September 13, 2008 email
from Christopher Tsuboi to various FRBNY
staff is marked, "FR Restricted-Highly
Confidential-Do Not Distribute."
Supervisory information. Exemption 4. (not marked
000146-54 above.
000146-54 above.
Withheld in
Full
2
001095 September 13, 2008 email from Tanshel
Pointer (FRBNY) to Mark VanDerWeide
providing an agenda for a Lehman Update
with FRBNY President Geithner.
000010-11 above.
Redacted 1
analyst to Governor Kroszner, providing an
opinion on market ramifications if the
government were not to bailout Lehman.
outside analyst.
000009 above.
Redacted 2
Page 95 of 106
Material
Full or
Redacted
number
of pages
between Mark VanDerWeide, Patrick
Parkinson, Lucinda Brickler, Joseph Sommer
and Sophia Allison regarding Lehman tri-
party problem.
000010-11 above.
Redacted 1
001100-001101 September 14, 2008 email from Sean O'Neal
(Cleary Attorney) to various FRBNY and SEC
staff regarding revising the attached
timeline.
0000422-24 above. In this
pre-decisional, inter-agency
communication, Cleary
Gottlieb, in its role as a
consultant to the Board and
FRBNY, comments on an
attached timeline.
Redacted 2
001102-001103 September 13, 2008 CGSH Revised Draft of a
Lehman Bankruptcy Timeline. This
document headed, "Privileged and
Confidential," is attached to email #001102-
001103, above.
1100-01 above.
Withheld in
Full
2
001107 September 14, 2008 email from Susan Foley
to William Nelson regarding restricting
access to daylight credit of DI subs of
Lehman.
000036-38 above.
000480-484 above.
Redacted 1
001110-001116 September 14, 2008 timeline which
incorporates the Cleary plan on Lehman
bankruptcy. This document is attached to a
to various SEC and FRBNY staff.
000422-24 above.
Withheld in
Full
7
Page 96 of 106
Material
Full or
Redacted
number
of pages
Bernanke to FRBNY President Geithner,
Governor Warsh, Governor Kohn, and
Michelle Smith (Office of Board Members)
and copying Brian Madigan, Scott Alvarez,
and Patrick Parkinson providing a European
perspective on the Lehman situation.
deliberations and Chairman
Bernanke's email address.
000726 above. This
document contains
information voluntarily
provided by officials, rather
than agencies, of foreign
governments.
000068 above.
000002 above.
Redacted 1
Brickler to various FRBNY staff regarding a
triparty repo discussion with JPMC.
000105-110 above.
000010-11 above.
000105-110 above.
Redacted 1
#1054, above regarding international
settlements for Lehman. This email from
Johan Pissens (National Bank of Belgium) to
Lawrence Sweet, discusses Lehman
settlement in euroclear.
information.
000336-341 above.
Redacted 2
Page 97 of 106
Material
Full or
Redacted
number
of pages
001123-001125 September 13, 2008 email from Jeff Stehm
to Lawrence Sweet, Marsha Takagi, Lisa
Joniaux, Jeanmarie Davis, and Jeffrey
Marquardt, seeking suggestions on a draft
email to Governor Kohn regarding Lehman's
clearing and settlement activities. Takagi
and Stehm then go back and forth with
comments.
draft.
000010-11 above.
Redacted 3
001128-001134 DUPLICATE of #001110-1116, inadvertently
Full
7
001135-001138 September 14, 2008 email from Diane
Dobbeck to various Federal Reserve System
staff, sending draft monitoring questions for
a CPC (FRB "central point of contact" with a
supervised LFI) call and asking for thoughts
on what else to include. James Embersit
responds, asking his staff to make the
attached questions a priority.
000010-11 above.
1135-38 above.
Redacted 4
001150 September 14, 2008 email from Susan
McLaughlin (FRBNY) to HaeRan Kim (FRBNY)
and Joseph Sommer and copying William
Walsh (FRBNY) asking a question about PDCF
in regards to Lehman.
000010-11 above.
Redacted 1
Page 98 of 106
Material
Full or
Redacted
number
of pages
Bernanke to Governor Kohn and Governor
Kroszner, and copying Brian Madigan and
Scott Alvarez, regarding an announcement
on Lehman.
address.
000068 above.
000002 above.
Redacted 1
001152 Continuation of email #001151, above
regarding an announcement on Lehman.
Governor Kroszner responds to Deborah
Bailey and Scott Alvarez with a plan.
address.
000068 above.
000002 above.
Redacted 1
VanDerWeide to Scott Alvarez regarding a
bankruptcy discussion with Chairman
Bernanke.
000036-38 above.
Redacted 1
001154-001156 September 14, 2008 email from William
Carlucci (FRBNY) to various Board, FRBNY
and SEC staff providing an analysis of the
potential impact on the Fixed Income
Clearing Corporation if tri party does not
unwind.
and Inter-agency
deliberations.
000320-22 above.
000010-11 and 000422-24
above.
000320-22 above.
Redacted 3
forwarding email from Che Sidanius to Todd
Waszkelewicz and Jeremy Gagne and
copying William Johnson (FRBNY) providing a
status update and plan for Lehman.
000320-22 above.
000010-11 above.
000320-22 above.
Redacted 1
Page 99 of 106
Material
Full or
Redacted
number
of pages
001159 Todd Waszkelewicz forwards email #001157,
above to various Board and FRBNY staff with
an additional update.
000320-22 above.
000320-22 above.
Redacted 1
Kohn to Chairman Bernanke regarding
briefings on Lehman.
email address.
document). See Bates
000817 above.
000002 above.
Redacted 1
001161-001162 September 14, 2008 email from Sarah Harris
to Marsha Takagi and copying Jeffrey
Marquardt, Jeff Stehm, Lawrence Sweet
regarding a Lehman call on payment,
clearing, and settlements. Marsha Takagi
responds to Jeff Stehm regarding discussions
with FSA.
deliberations.
000336-341 above.
000010-11 above.
Redacted 2
Bernanke to Governor Warsh, Scott Alvarez,
and Brian Madigan and copying Governor
Kohn, asking for updates. Governor Kohn
responds with updates on Lehman.
address.
000068 above.
000002 above.
Redacted 1
Page 100 of 106
Material
Full or
Redacted
number
of pages
to various Board and FRBNY staff providing
an update on developments regarding
Lehman.
000010-11 above.
Redacted 1
001165 September 14, 2008 email from Gregory
Gaare (FRBNY) to various Federal Reserve
System staff summarizing a conversation
with a JPMC credit executive regarding
exposures to Lehman.
000105-110 above.
000105-110 above.
Redacted 1
001166-001167 Continuation of email #001157, above
regarding a status update and plan for
Lehman. In this email, Che Sidanius provides
information about Lehman counterparties.
000320-22 above.
000320-22 above.
Redacted 2
001168-001169 September 14, 2008 email from James
Clouse to Michael Gibson regarding an ISDA
Statement on Lehman Brothers Bankruptcy
Trades.
000036-38 above.
Redacted 2
Bernanke to Governor Warsh asking
questions about the Lehman bankruptcy.
address.
000817 above.
000002 above.
Redacted 1
Bernanke to Governor Kohn offering
assistance on making phone calls. Governor
Kohn responds, offering names of people to
call and summarizing a call Kohn had.
deliberations and Chairman
Bernanke's email address.
000726 above.
000817 above.
000002 above.
Redacted 1
Page 101 of 106
Material
Full or
Redacted
number
of pages
001174-001175 Draft talking points for a September 14,
2008 International Regulators' Call for FX
Settlements. This document is attached to a
September 14, 2008 email from Jeff Stehm
to Jeffrey Marquardt, Lawrence Sweet, and
Marsha Takagi.
000010-11 above.
Withheld in
Full
2
001177-001178 Meeting minutes from a September 14, 2008
CLS call with Citibank. This document is
from Jeremy Gagne to various Board and
FRBNY staff.
000320-22 above.
000320-22 above.
Withheld in
Full
2
001180 September 14, 2008 email from Michelle
Smith, forwarding an email from Jim
Wilkinson (Treasury) regarding an SEC
statement, to Chairman Bernanke, Governor
Kohn, Governor Warsh and David Skidmore.
address.
000002 above.
Redacted 1
Page 102 of 106
Material
Full or
Redacted
number
of pages
001181-001185 (1) September 11, 2008 email from Clinton
Lively = DUPLICATE of email #000592,
inadvertently not marked as duplicate. (2)
September 11, 2008 email from Lucinda
Brickler = DUPLICATE of email #000738,
inadvertently not marked as duplicate. BUT,
#000738 is inadvertently marked as
duplicate and does not contain the
attachments contained here. [September
11, 2008 email from Lucinda Brickler to
various Board and FRBNY staff attaching
information regarding new triparty issues in
the event that JPMC unwinds Lehman's
triparty repo.] (3) September 11, 2008 email
from Jonathan Polk (FRBNY) to various
FRBNY staff regarding a Lehman derivatives
close out. (4) September 11, 2008 email
from Theodore Lubke = DUPLICATE of email
#000771-000773, inadvertently not marked
as a duplicate.
000010-11 above.
Redacted 5
001189-001192 Document summarizing the Desk's
operational exposures. This document is
from Susan Stiehm (FRBNY) to Theodore
Lubke and Wendy Ng contained in the email
chain #001181-001185, above.
000010-11 above.
Withheld in
Full
4
Page 103 of 106
Material
Full or
Redacted
number
of pages
001193 DUPLICATE of document #000793-000794,
Full
1
Full
5
Sheet 9 12 08," and headed, "Restricted
F.R.," regarding insulating tri party repo
investors from a default or bankruptcy. This
2008 email from Lucinda Brickler to various
Board and FRBNY staff in the email chain
#001181-001185, above.
000010-11 above.
Withheld in
Full
2
001201-001203 Document entitled, "Contingency Planning
Loss of Confidence in Major Securities
Dealer," and headed, "Restricted F.R."
regarding maintaining confidence in tri party
repo market. This document is attached to a
September 11, 2008 email from Lucinda
Brickler to various Board and FRBNY staff in
the email chain #001181-001185, above.
000010-11 above.
Withheld in
Full
3
Internal analysis. Exemption 5. Withheld in
Full
3
001207 DUPLICATE of document #000593,
Internal analysis. Exemption 5. Withheld in
Full
1
Page 104 of 106
Material
Full or
Redacted
number
of pages
001208-001210 DUPLICATE of email # 000771-000773,
Full
5
#000374-000375, above. Jamie McAndrews
responds with comments and questions on
Lucinda Brickler's JPMC cheat sheet
attachment. Includes a DUPLICATE of
#000374-000375 inadvertently not marked
as a duplicate.
000010-11 above.
Redacted 1
Full
2
Full
3
001226 DUPLICATE of document #000515,
Full
1
001228 DUPLICATE of email #000737-000738,
Page 105 of 106
Material
Full or
Redacted
number
of pages
Lubke to various Board and FRBNY staff
regarding a Default management group
meeting. Contains a DUPLICATE of email
#000750, inadvertently not marked
duplicate.
000010-11 above.
Redacted 2
001231-001232 September 12, 2008 draft document
entitled, "Convening the FRBNYs Operations
default by Lehman." This document is
000010-11 above.
Withheld in
Full
2
001234-001236 Document entitled, "Convening the FRBNYs
Operations Management Group OMG to
consider potential actions in the event of a
default by Lehman," and headed, "Restricted
F.R." This attachment to a September 12,
2008 email from Jamie McAndrews to
Patrick Parkinson and copying various Board,
FRBNY and SEC staff, is an updated version
of document #001231-001232, above.
000010-11 above.
Withheld in
Full
3
Full
3
Full
3
Page 106 of 106
Material
Full or
Redacted
number
of pages
001249-001252 September 13, 2008 conference call notes
on an LFIT/RSO Discussion on Market Events
and Issues. This document is attached to a
September 13, 2008 email from Stacy
O'Bryant (Federal Reserve Bank of
Richmond) to various Federal Reserve
system staff.
000010-11 above.
Redacted 4
001253-001254 September 15, 2008 email from John Harvey
(FRBNY) to various FRBNY staff, providing
minutes to a meeting held with Deutsche
Banks Treasurer of the Americas Division
with Deutsche Banks CPC Team.
000105-110 above.
000105-110 above.
Redacted 2

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T h e V a u g h n I n d e x D o c u m e i z t s





UNITED STATES DISTRlCT COURT
)
)
VERN McKINLEY, )
)
)
Plaintiff, )
)
v. ) Civil Action No.1: 10-cv-007S1 (ABJ)
)
)
SYSTEM, )
Defendant. )
DECLARATION OF JEFF J. STEHM
I, Jeff J. Stehm, hereby affinn the following as my testimony in the above-captioned
case:
1. I am a Senior Associate Director in the Division of Reserve Bank Operations and
Payments Systems ("RBOPS") of the Board of Govemors of the Federal Reserve System
("Board"), a position I have held since March 2011. Prior to that, I was an Associate
Director (beginning 2008), a Deputy Associate Director (beginning 2006), an Assistant
Director (beginning 1999), and prior to 1999, I held various positions at the Board as a
manager and staff analyst (beginning 1983).
2. I was one of a number of Board staff responsible for providing infonnation and analysis
to the Board on various aspects of the market events in late 2008 as they related to my
areas of responsibility. The facts herein are based on my personal knowledge and
information made known to me in my official capacity as an Associate Director and
Senior Associate Director in RBOPS.
3. My current duties as a Senior Associate Director in RBOPS include administering two
programs responsible for the analysis and oversight of risk and risk management issues
associated with systemically important payment, clearing and settlement systems. The
payment, clearing and settlement infrastructure supporting the U.S. financial system
consists of a combination of: (a) key payment services provided by the Federal Reserve
Banks (FRBs) to depository institutions; and (b) a number of private-sector operated
systems, such as electronic funds transfer systems, clearinghouses, securities and foreign
exchange settlement systems, and central counterparties, through which payments,
securities trades and other financial instruments are reconciled and settled between
market participants. In 1985, the Board adopted a two-part policy, known as the
payments system risk policy (the PSR policy). Part 1 ofthis policy addresses the risks
that such systems present to the financial system generally and Part 2 addresses risks to
the FRBs in their provision of accounts and services to account holders. RBOPS is
responsible for administering the overall PSR policy. The programs under my
responsibility were responsible for administering Part 1 ofthe PSR policy. As part of
these responsibilities, RBOPS works closely with other foreign and domestic authorities,
such as bank supervisors, market regulators, and foreign central banks, to foster the
integrity of, and effectively oversee, systemically important payment, clearing and
settlement systems, including the payment services provided by the FRBs to depository
institutions.
2
Board Authority Concerning Private-Sector Payment,
Clearing and Settlement Systems
4. Payment, clearing and settlement systems facilitate the multilateral clearing and
settlement of financial transactions among participating financial institutions. These
systems may be chartered as financial institutions in their own right or as general
corporations and are typically supervised by one or more federal agencies. The Board
has direct bank supervisory authority over those payment, clearing and settlement
systems that are state member banks (i.e., have state banking charters and are members of
the Federal Reserve System under sections 9 and 11 of the Federal Reserve Act (FRA),
12 U.S.C. 248(a)(1) and 325), or are chartered as Edge Act corporations under 12
U.S.C. 625. In addition, to the extent the financial institutions that participate in a
payment, clearing or settlement system are chartered as state member banks or Edge
corporations, the Board also would have direct supervisory authority over those financial
institutions, irrespective ofthe charter of the payment, clearing or settlement systems in
which they participate.
5. The Board, through the Federal Reserve Bank of New York (FRBNY), conducts regular
examinations of those payment, clearing and settlement systems chartered as state
member banks or Edge Act corporations and those participating financial institutions
subject to the Board's supervisory authority and has examiners continually on site to
monitor their safety and soundness and compliance with relevant laws and regulations.
Board-supervised payment, clearing and settlement systems chartered as financial
institutions include: (1) CLS Bank, chartered as an Edge Act corporation, which operates
the largest multi-currency settlement system for foreign exchange (FX) transactions; (2)
Depository Trust Company (DTC), a state member bank and limited purpose trust
3
company chartered in New York, which provides securities settlement services for
equities, corporate and municipal bonds, and money market instruments; (3) ICE Trust, a
state member bank and limited purpose trust company chartered in New York, which acts
as a central counterparty in credit default swaps (CDS); and (4) Warehouse Trust, a state
member bank and limited purpose trust company chartered in New York, which acts as a
trade repository for over-the-counter credit derivatives transactions.
Background Regarding Lehman Brothers
6. In 2008, Lehman Brothers Holdings, Inc. (Lehman Brothers), was a large financial
services group whose affiliates provided a wide variety of financial services to clients
worldwide, including equity and fixed income sales, trading and research, investment
banking services and investment management and advisory services. As such, Lehman
Brothers affiliates engaged in a significant number of transactions in securities and other
financial instruments across a variety of U.S. and foreign financial markets. These
transactions had to be cleared and settled on a daily basis through various payment,
clearing and settlement systems. To do so, various Lehman Brothers affiliates were
either direct participants in several U.S. and foreign payment, clearing or settlement
systems, or used the clearing services of another financial institution that was a direct
participant in such systems, to clear and settle transactions in various financial
instruments, including some of the systems supervised by the Board listed in ~ 5 above.
In early September, 2008, Lehman Brothers was experiencing severe liquidity problems,
which raised the possibility that it might file for bankruptcy protection. At the time, the
effect of such a filing and the implications for Lehman Brothers affiliates in the United
States and worldwide were unknown. Because Lehman Brothers was a major participant
4
in world financial markets, its bankruptcy could have major implications for, among
other things, U. S. and foreign payment, clearing and settlement systems, including Board
regulated systems, though which Lehman Brothers cleared and settled transactions. In
particular, if Lehman Brothers filed for bankruptcy, it might default on its clearing and
settlement obligations to such systems, have such settlement obligations stayed by a
court, or otherwise create uncertainties and disruptions to the settlement process,
potentially posing a severe threat both to individual systems that cleared Lehman
Brothers obligations and more generally to the smooth functioning of payment, clearing
and settlement systems in the United States and abroad and the financial markets they
support. In order to assess this situation more carefully and to prepare the Board for any
potential action it might decide to take in the event these disruptions occurred, as
Associate Director in RBOPS, I, along with other Board and FRBNY staff members,
gathered and assessed information on the major payment, clearing and settlement systems
in which Lehman Brothers affiliates were participants, and determined the settlement
obligations and other exposures of these systems to Lehman Brothers affiliates. Among
other information, the Board, in its supervisory capacity, and its delegee, the FRBNY,
gathered information from the systems listed in ~ 5 above in order to assess the risk to the
safety and soundness of these systems in the event of a Lehman Brothers default.
Information Obtained from Regulated Payment, Clearing and Settlement Systems
7. I have reviewed the following documents from the Lehman Brothers Vaughn Index
(FOIA # 10-0267): 320-322,323-335,354-355,360,368-369,444-448, 449-470, 471
474,523-577,719-720, 721-724, 782,818-820,822-868,936-941,943-945,1059-1062,
5
1088-1089,1154-1156,1157-1158,1159,1160,1166, 1176-78. These documents
contain infonnation regarding Lehman's involvement in certain payment, clearing and
settlement systems collected by the Board and FRBNY in a supervisory capacity from
regulated payment, clearing and settlement systems identified in ~ 5 above. In addition,
document 936-941 contains some infonnation the Board received from the SEC in its
capacity as Lehman's regulator regarding Lehman's participation in payment, clearing
and settlement systems. Documents 936-941 and 1088-1089 also contain some limited
infonnation the Board obtained from foreign bank regulators on a voluntary basis
regarding Lehman's participation in payment, clearing and settlement systems abroad.
As described in ~ 12 below, these foreign bank regulators do not customarily disclose this
infonnation to the public. The Board and FRBNY obtained this infonnation in order to
assess the exposure of regulated payment, clearing and settlement systems chartered as
financial institutions to Lehman Brothers and to gauge the possible harm to these
regulated systems and the financial system more generally in the event that Lehman
defaulted on its payment, clearing and settlement obligations. This infonnation was
contained in or related to examination, operating or condition reports prepared by, or on
behalf of, or for the use of an agency (the Board) responsible for the regulation or
supervision ofthe financial institutions listed in ~ 5 above. This infonnation is highly
confidential for the reasons described in ~ 9 below. These regulated systems, chartered as
financial institutions, provided this infonnation to the Board and FRBNY on the
understanding that it would remain confidential, and would be used for supervisory
purposes. It is my opinion that disclosure of this infonnation would have a chilling effect
on the frank exchange of infonnation between the Board or FRBNY and regulated
6
systems chartered as financial institutions necessary for the Board effectively to perform
its function as supervisor and regulator of such regulated systems.
8. In September 2008, the Board received information that AIG was having severe liquidity
problems and might file for bankruptcy protection. AIG was an insurance company, not
a securities broker dealer, and did not engage in large volume securities trades.
Nevertheless, RBOPS was asked to gather information from regulated payment, clearing
and settlement systems on the degree to which AIG or its subsidiaries participated in any
of the regulated systems listed in ~ 5 above, and to assess whether the bankruptcy of AIG
or its subsidiaries posed any risks, or raised any supervisory issues, with regard to such
regulated systems and their participating financial institutions. I have reviewed the
following documents from the AIG Vaughn Index (FOIA # 10-0251): 841-843, 850-851,
902,925,945,976-977,982-983, 1070-1071, 1097. The documents contain information
that the Board, or FRBNY as the Board's delegee, collected in its supervisory capacity
from the regulated systems listed in ~ 5 above. The Board, or its de1egee, the FRBNY,
gathered this information in its capacity as supervisor of these systems, and the
information is contained in or related to examination, operating or condition reports
prepared by, or on behalf of, or for the use of an agency (the Board) responsible for the
regulation or supervision ofthe financial institutions listed in ~ 5 above. As described in
~ 7 above, these institutions provided this information to the Board and FRBNY on the
understanding that it would be kept confidential and would be used for supervisory
purposes. As a result, disclosure of this AIG-re1ated information would have a chilling
effect on communications between the Board or FRBNY and regulated financial
institutions as described in ~ 7 above.
7
9. It is important to the continued effectiveness ofthe supervisory process for financial
institutions and bank supervisors to know that the information exchanged in the
supervisory process is, and will remain, confidentiaL The systems listed in ~ 5 above and
the financial institutions that participate in them face actual competition in the market for
the provision of payment, clearing and settlement services from other domestic and
international clearinghouses and financial institutions. Supervised financial institutions,
including supervised payment, clearing and settlement systems, frequently provide
supervisors with detailed, highly sensitive commercial information -- including the
information described in ~ ~ 7 and 8 above -- that they do not customarily disclose to the
public. In addition, disclosure of this information is likely to cause substantial
competitive harm to these systems and the regulated financial institutions that participate
in them. For example, if the information discussed in ~ ~ 7 and 8 above were disclosed to
the public, a participant's competitors could use the data to assess sensitive trading,
funding and credit relationships and use this analysis potentially to harm the system's and
its participants' on-going businesses activities. In an extreme case, a competitor could
exploit the information to undermine confidence in the ability of a particular system to
settle, or weaken a specific system participant by exploiting weaknesses in its trading and
funding positions, for instance by pulling funding facilities that the competitor had
outstanding to the participant or informing the participant's customers and market
analysts that the institution faced a funding shortage, which likely would cause some
retail and commercial customers to move their business to other banks and may cause
analysts to downgrade the institution's stock. Supervised financial institutions rely on
bank supervisors to protect the confidentiality of information obtained through the
8
supervisory process, and the Board (and other financial institution supervisors) has
procedures and controls in place to ensure that confidential examination information is
not disclosed to the public, or outside ofthe institution's regulators. Although supervised
financial institutions are expressly required to provide some information to their
supervisors, not all information supervisors request is specifically required by statute or
regulation. Supervisors rely on the willingness of supervised institutions to provide full
information in order to assure a robust supervisory environment, and supervised
institutions are willing to provide this information because they know that the supervisors
will maintain its confidentiality. In particular, the timely provision of full information is
critically important during market crises when supervisors are attempting to quickly
assess a wide range of dynamic factors affecting a number of supervised institutions and
financial markets. The information referred to in ~ ~ 7 and 8 above was provided by
supervised financial institutions under this assumption of confidentiality. It is likely that
banks would be significantly less willing to provide bank supervisors and other
regulators, including the Board, with sensitive commercial information of this type that is
not expressly required to be provided if they believed that the information would be
disclosed to the public. Thus, it is my view that release of the information contained in
the documents identified in ~ ~ 7 and 8 above is likely to cause substantial competitive
harm to the financial institutions involved or to impair the Board's ability to obtain
necessary information in the future, and could chill the free flow of information between
supervised institutions and the Board and FRBs as the Board's delegees.
9
Information Obtained on a Voluntary Basis From Foreign Central Banks,
Foreign Bank Supervisors, and a Non-Board Regulated Clearinghouse
10. In addition to the information described in ~ ~ 1 7 and 8 above, the Board and FRBNY
obtained information regarding Lehman Brothers' positions in financial markets
worldwide on a voluntary basis from foreign central banks, foreign bank supervisory
authorities, and foreign market regulators. That information is contained in Lehman
Brothers Vaughn Index (FOIA # 10-0267) documents 000336-341,605, 1054, 1119-20,
and 1161-1162.
11. The Board and FRBNY obtained the information described in ~ 10 above as part of the
Board's ongoing effort to assess the potentially serious effects on payment, clearing and
settlement systems worldwide of a possible Lehman Brothers bankruptcy, and to inform
its regulatory response to the unfolding crisis. As it did in the case of the Lehman
Brothers information discussed in ~ 10 above, the Board frequently exchanges
information with foreign financial regulators and authorities on a voluntary basis in order
to assess and maintain stability in world payment and settlement systems. Such stability
is vital to the functioning of U.S. and world financial markets.
12. These foreign authorities provided the information described in ~ 10 above to the Board
on a voluntary basis on the understanding that it would be kept confidential. No U.S. law
or regulation requires these foreign authorities to provide this information to the Board.
In my position as Associate Director in RBOPS, I have regular contact with foreign
central banks, foreign bank supervisory authorities and foreign market regulators. I am
aware through long dealings with these authorities that they do not customarily disclose
such information to the public. Based on my past dealings with these authorities, it is my
belief, given the sensitivity of the information exchanged and these authorities'
10
understanding that the Board would hold this information in confidence, that these
authorities likely would be much less willing or unwilling to provide similar, sensitive
information in the future if this information were disclosed to the public.
Information Obtained from FRBs as a Result of the Board's Authority
Concerning the Federal Reserve Banks
13. Sections II(a)(1) and 110) of the Federal Reserve Act ("FRA"), 12 U.S.C. 248(a)(I)
and (j), authorize the Board to examine at its discretion the accounts, books and affairs of
each FRB and of each member bank and to exercise general supervision over the FRBs.
The legislative history of section 11 of the FRA states that the Board's authority to
examine and oversee the FRBs is similar to the authority granted to the Comptroller of
the Currency to examine national banks, but the Board's examinations and supervision of
FRBs are to be more constant, close and intimate. Accordingly, the Board, through
RBOPS and other divisions, serves as the financial institution supervisor or regulator of
the FRBs.
14. RBOPS is the division at the Board responsible for overseeing the twelve FRBs'
provision of payment services to depository institutions and to the federal government,
among other things. For depository institutions, the FRBs maintain accounts and provide
various payment and settlement services, including collecting checks, electronically
transferring funds, providing settlement services, and distributing and receiving currency
and coin. For the federal government, the FRBs act as fiscal agents, paying Treasury
checks; processing electronic payments; and issuing, transferring, and redeeming U.S.
government securities.
15. Among the FRBs' functions associated with payment and settlement services over which
RBOPS exercises supervisory authority is the FRBs' extension of daylight overdrafts to
11
depository institutions (DIs) that maintain accounts at an FRB. Although these programs
are not under my direct areas of responsibility, I am familiar with them through my long
employment in RBOPS. DIs use daylight overdrafts to facilitate the settlement of
payments. As stated in ~ 3 above, the Board adopted its PSR policy in 1985 to address
the risks that payment and settlement activity, and in particular the provision and use of
daylight overdrafts, present to the financial system and to FRBs. Each FRB is
responsible for administering Part 2 of the PSR policy with regard to the provision of
daylight overdrafts to DIs in its district. In tum, the Board, through RBOPS, supervises
the FRBs' provision of intraday credit to DIs, to ensure compliance with the PSR policy
and other policies and regulations regarding daylight overdrafts and to ensure that an
FRB's provision of daylight overdrafts to any particular DI does not present an undue
risk to the FRB.
16. In response to Lehman's evolving liquidity crisis described above, RBOPS was asked to
determine whether any of Lehman's DI subsidiaries, which included Lehman Brothers
Commercial Bank and Lehman Brothers Bank FSB, both of which had accounts with an
FRB, had any outstanding daylight overdrafts in their accounts at an FRB. RBOPS
gathered this information in its supervisory capacity to assess whether a possible Lehman
Brothers bankruptcy could cause those DIs to default on their repayment of daylight
overdrafts at a FRB, posing a credit risk to a FRB, and to discuss with the FRBs what
steps should be taken to guard against loss. I was a recipient of some of these documents,
and reviewed others in preparing this declaration. Documents in the Lehman Brothers
Vaughn Index (FOIA # 10-0267) numbered 484-86,493-496,499-500, 1074, 1106-1107
contain information relevant to intraday credit extended by an FRB to Lehman Brothers
12
Commercial Bank or Lehman Brothers Bank FSB. For the reasons discussed above, in
September 2008, RBOPS obtained information from FRBs relevant to daylight overdrafts
by AIG's subsidiary bank, AIG Federal Savings Bank, when it became apparent that AIG
might file for bankruptcy protection. Documents in the AIG Vaughn Index (FOIA # 10
0251) numbered 663,672,673,674,915 contain information relevant to intraday credit
extended by an FRB to AIG FSB. RBOPS obtained this information from FRBs in its
capacity as regulator and supervisor of the FRBs and as part of the supervisory process in
order to assess possible credit risks to the FRBs in the event of default by those DIs. This
information was contained in or related to examination, operating or condition reports
prepared by, or on behalf of, or for the use of an agency (the Board) responsible for the
regulation or supervision of financial institutions (the FRBs). These documents are
highly confidential in that they contain data regarding FRBs' exposure from daylight
overdrafts to individual DIs. The FRBs understood when providing this information to
the Board that it would be used for supervisory purposes and its confidentiality would be
maintained.
I declare under penalty of perjury that the foregoing is true and correct. Executed in the city of
Washington, D.C. on this I ~ d a y of May, 2011.
l3






IN THE UNITED STATES DISTRICT COURT
)
)
VERN McKINLEY, )
)
)
Plaintiff, )
)
v. ) Civil Action No. 1:10-cv-00751 (ABJ)
)
)
SYSTEM, )
Defendant. )
)
DECLARATION OF MICHAEL R. FOLEY
I, Michael R. Foley, declare as follows:
Background
1. I am Senior Associate Director in the Division of Banking Supervision and Regulation
("BS&R") of the Board of Govemors ofthe Federal Reserve System (the "Board"). I
have been Senior Associate Director since July 2010. Before being appointed Senior
Associate Director, I was Senior Advisor in BS&R, a position that I held since
December 2008. Prior to that, I spent more than 10 years at a major credit rating
agency, Moody's Investors Service, in a variety of roles, including Managing Director
for N. American Banks, Group Managing Director for Corporate Ratings, and Senior
Managing Director, Head of Europe.
2. In my position as Senior Associate Director, I have responsibility for BS&R's
Operating Committee Program and Firm Analytics Sections as well as the Portfolio
Analytics Section. The Operating Committee Program and Firm Analytics Sections are
responsible for the oversight ofbank supervision which is administered at the Federal
Reserve Banks ("FRBs"). These sections also develop supervisory program
requirements including the Federal Reserve's risk-focused consolidated supervision
program ofthe portfolio oflarge complex banking organizations supervised and
regulated by the Federal Reserve ("LCBOs"). A subset of these organizations
comprised of the largest firms are sometimes referred to in the Federal Reserve System
as large financial institutions ("LFls"). The primary responsibilities of these sections
are to inform and advise BS&R management, the Board, and others on the effectiveness
of supervision and financial condition of each LCBO, and to oversee the Federal
Reserve's application of its risk-focused consolidated supervision program for the firms
in this portfolio. In my position, I frequently interact with other domestic and foreign
bank supervisors and, where appropriate, exchange information with them on matters of
cornmon concern to the bank supervisory process.
3. LCBOs are bank holding companies or foreign banking organizations characterized by
the scope and complexity of their domestic and international operations; their
participation in large volume payment and settlement systems; the extent of their
custody operations and fiduciary activities; and the complexity of their regulatory
structure, both domestically and in foreign jurisdictions. In order to ensure that each
LCBO is operating in a safe and sound manner in compliance with applicable policies,
laws and regulations, these firms are subject to continuous on-site supervision by a
team ofFRB examiners. FRB examiners on site at an LCBO have almost unfettered
2
access to information as needed to assess the safety and soundness of the firm and its
compliance with policies, laws and regulations.
4. In connection with my duties at the Board, I am aware that the Board considered the
funding difficulties of American International Group ("AIG") in September 2008 and
that, on September 16,2008, the Board authorized the Federal Reserve Bank ofNew
York ("FRBNY") to extend credit to AIG. I am also aware that, in 2008, Board
members and staff considered the capital and liquidity problems of Lehman Brothers
Holdings, Inc. (HLehman Brothers"), which filed for bankruptcy protection on
September 15,2008. In my capacity as Senior Associate Director, I am responsible for
oversight of the bank examination process at the FRBs and have extensive knowledge
of the process by which FRB examiners gather information from LCBOs, the types of
information gathered, and of the risks ofharm to LCBOs and to the supervisory
relationship from disclosure of certain types of information.
5. I have been informed that some information gathered by FRB examiners from regulated
LCBOs in 2008 and provided to senior staff in BS&R, and some related information, is
responsive to a request under the Freedom of Information Act, 5 U.S.C. 552
("FOIA"), made by Vern McKinley (the "plaintiff') to the Board by email dated March
21,2008 (FOIA # 2010-251) (the "AIG Request"), and to a FOIA request by the
plaintiff to the Board by email dated March 28,2010 (FOIA # 2010-267) (the "Lehman
Request"). I have read the AIG Request and the Lehman Request and am familiar with
their contents. I have also reviewed the Vaughn index ofresponsive documents
provided to the plaintiff in connection with the AIG Request (the "AIG Vaughn
Index") and the Vaughn index of responsive documents provided to the plaintiff in
3
connection with the Lehman Request (the "Lehman Vaughn Index"). I have reviewed
the documents described below in my capacity as Senior Associate Director. I am
familiar with the contents of these documents, the types of information exchanged, and
the authors and recipients of most of those documents. Accordingly, the facts herein
are based on my personal knowledge and information made known to me in my official
capacity as Senior Associate Director.
6. In September 2008, Board members and staff in BS&R were concerned about the
effects a possible AIG or Lehman Brothers bankruptcy would have on financial
markets given the prominent position of AIG and Lehman Brothers in those markets.
Board members and staff in BS&R staff were also concerned about the impact an AIG
or Lehman Brothers bankruptcy filing would have on individual financial institutions
supervised by the Board, including LCBDs, and other financial institutions not
supervised by the Board. As a result, in accordance with well-established supervisory
processes including the involvement of on-site examiners described above, in
September 2008, Board and FRB supervisory staff surveyed the LCBDs for purposes of
assessing their real-time exposures to AIG and Lehman Brothers. This action was
taken as part of the Board's consideration of potential supervisory responses to AIG's
and Lehman Brothers' funding difficulties. Board members and staff also exchanged
information with domestic and foreign banking supervisors, as appropriate, to assess
the potential impact of AIG' s and Lehman Brothers' funding difficulties on regulated
financial institutions and markets. Some of this information is described below.
7. Some of the documents identified on the AIG Vaughn Index are emails and/or
4
attachments to emails among BS&R supervisory staff and examination staff at a
number ofFRBs conveying information obtained by bank examiners through the
supervisory process from regulated LCBOs. I have reviewed these emails and
attachments and am familiar with their contents. These emails and attachments are
documents numbered 000099-100, 375, 383,433,464-65,559,561,564-565,566-571,
615,622-623,644-645,656,658,664,676,681,685, 723-724, 768-769, 771, 772, 793,
806,809,813,816-817,818,823,837,838-840,845,882,896,927,933,939,944,
946,947,960,961,987, 1063, 1067, 1079, 1080, 1081, 1084 and 1102. These em ails
and attachments identify: the exposures ofindividual Federal Reserve-regulated
financial institutions to AIG; the exposure of financial institutions regulated by other
bank supervisory agencies to AIG; AIG's liquidity position; and the potential impact on
Board regulated and non-Board regulated financial institutions of an AIG bankruptcy.
Document 000099-100, for example, contains a chart prepared by FRBNY examiners
using information obtained through the supervisory process regarding seven LCBOs'
credit exposures to AIG. Documents 000564-565 and 000566-571 are an email and
attachment containing detailed information obtained by the Federal Reserve Bank of
Richmond examination staff through the supervisory process from Bank of America
Corporation detailing that regulated LCBO's counterparty credit exposure to ArG.
Document 001079 contains supervisory information on AIG exposure of several
national banks regulated by the Office of the Comptroller of the Currency ("OCC")
obtained by the OCC, a federal financial institutions regulatory agency, from regulated
financial institutions and provided to Federal Reserve Bank examiners. Details on
these exposures were gathered by FRB bank examiners, and provided to Board staff in
5
BS&R, as part ofthe bank supervision and examination process described in " 2-3
above. This infonnation was contained in or related to examination, operating or
condition reports prepared by, or on behalf of, or for the use of an agency (the Board)
responsible for the regulation or supervision of financial institutions. This infonnation
was conveyed to and considered by Board staff in BS&R in order to detennine the
exposure of regulated LCBOs to AIG, to consider the risks to supervised LCBOs of a
possible AIG bankruptcy, and to take appropriate supervisory steps. These regulated
LCBOs provided this infonnation to FRB examination staff on the understanding that it
would remain confidential, and would be used for supervisory purposes. It is my
opinion that disclosure of this infonnation would have a chilling effect on the frank
exchange ofinfonnation between the Board or FRBs and regulated financial
institutions necessary for the Board and FRBs effectively to perfonn their function as
supervisor and regulator of financial institutions.
8. In addition to the documents discussed in' 7 above, a small number of documents on
the Lehman Vaughn Index, which I have reviewed, are emails and/or attachments
among BS&R supervisory staffand staff at the Federal Reserve Banks of Boston and
Chicago conveying infonnation obtained by examiners at those FRBs from regulated
financial institutions regarding those institutions' exposure to Lehman Brothers and
steps taken by those institutions in response to Lehman Brothers' capital and liquidity
shortages. These documents are numbered 000510-511,607, 799,919-922,930-935.
This infonnation was conveyed to and considered by Board staff in BS&R in order to
detennine the exposure of regulated LCBOs to Lehman Brothers, to consider the risks
to supervised LCBOs of a possible Lehman Brothers bankruptcy, and to take
6
appropriate supervisory steps. This information was contained in or related to
examination, operating or condition reports prepared by, or on behalf of, or for the use
of an agency (the Board) responsible for the regulation or supervision of financial
institutions. As described in ,-r 7 above, these regulated financial institutions provided
this information to FRB examination staff on the understanding that it would remain
confidential, and would be used for supervisory purposes. Disclosure ofthis
information would have a chilling effect on the exchange of information between the
Board or FRBs and regulated financial institutions.
9. In addition to the emails and attachments discussed in ,-r,-r 7-8 above, three emails on the
AIG Vaughn Index, numbered 000411, 678-679 and 1110, contain discussions among
senior Board staff in BS&R, and between senior Board staff and FRB examination
staff, reacting to information already obtained from regulated LCBOs or conveying
instructions to examiners in the field about information they should obtain about AIG
from regulated LCBOs. This type of exchange among senior supervisory staff, and
between senior supervisors and examiners in the field, is important to the functioning of
the bank examination process as it allows supervisors to discuss and evaluate
information and to make reasoned decisions about additional information that should be
obtained from supervised entities. Disclosure would chill the frank exchange of ideas
among bank examiners and their supervisors that is vital to the bank examination
process. This information is also contained in or related to examination, operating or
condition reports prepared by, or on behalf of, or for the use of an agency (the Board)
responsible for the regulation or supervision of financial institutions.
10. The bank supervisory process is one of continual interaction and information sharing by
7
regulated entities with their bank supervisors. It is extremely important to the
continued effectiveness of the supervisory process for financial institutions and
supervisors to know that the information exchanged in the supervisory process is, and
will remain, confidential. Financial institutions face actual competition in the market
for retail and commercial banking services from other domestic and international
institutions. Supervised institutions frequently provide supervisors with detailed,
highly sensitive commercial information -- including the information described in ~ ~ 7
8 above -- that they do not customarily disclose to the public. In addition to the fact
that supervised institutions do not customarily disclose this information to the public,
disclosure of this information is likely to cause substantial competitive harm to the
LCBOs. For example, if the exposure data obtained through the supervisory process
discussed in 'I,r 7-8 above were disclosed to the public, an LCBO's competitors could
use the data to assess sensitive trading relationships and credit relationships. The
competitors could use this analysis potentially to harm the firm's on-going businesses
activities. In an extreme case, a competitor could exploit the information regarding
exposures to weaken a specific entity and cause weaknesses in its liquidity position,
could pull or accelerate funding facilities the competitor had outstanding to the LCBO,
or could use the data to underbid the LCBO in the private funding markets. A
competitor also could inform the LCBO's customers and market analysts that the
LCBO faced a funding shortage, which likely would cause some retail and commercial
customers to move their business to other banks and may cause analysts to downgrade
the LCBO's stock. Supervised institutions rely on bank supervisors to protect the
confidentiality of information obtained through the supervisory process, and the Board
8
(and other financial institution supervisors) have systems in place to ensure that
confidential examination information is not disclosed to the public, or outside of the
bank's regulators. Although supervised institutions are expressly required to provide
some information to their supervisors, not all information supervisors request is
specifically required by statute or regulation to be provided. Supervisors rely on the
willingness of supervised institutions to provide full information in order to assure a
robust supervisory environment, and supervised institutions are willing to provide this
information because they know that the supervisors will maintain its confidentiality.
The information referred to in ~ ~ 7-8 above was provided by supervised LCBOs under
this assumption of confidentiality. It is likely that banks would be significantly less
willing to provide bank supervisors, including the Board and FRBs, with sensitive
commercial information of this type that is not expressly required to be provided if they
believed that the information would be disclosed to the public. Thus, it is my view that
release of the information contained in the documents identified in ~ ~ 7-8 above is
likely to cause substantial competitive harm to the LCBOs involved, would impair the
Board's ability to obtain necessary information in the future, and could chill the free
flow of information between regulated institutions and the Board and Federal Reserve
Banks.
11. Finally, Board staff in BS&R received a small amount ofinformation regarding AIG on
a voluntary basis from foreign bank supervisors. This information is listed in the AIG
Vaughn Index as document 000820. I reviewed document 000820 and am familiar
with its contents. As a result of my duties in BS&R described in ~ 2 above, I am
familiar with this type of information, the foreign bank supervisors who provided it,
9
and the BS&R staff members who received it. These foreign bank supervisors
provided the information in document 000820 to Board staff on a voluntary basis on the
understanding that it would be kept confidentiaL No U.S. law or regulation requires
provision of this type of information. As a result of my duties and frequent interactions
with foreign bank supervisors, I am aware that these foreign bank supervisors do not
customarily disclose this information to the public. It is my opinion that public
disclosure of this type of information likely would make these entities much less
willing or unwilling to provide similar, sensitive information to the Board in the future.
I declare under penalty of perjury that the foregoing is true and correct.
t<
Dated thisl) day of May, 2011, in Washington, D.C.
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Defendant Board of Governors Motion For Summary Judgment (Lawsuit #3)

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Defendant Board of Governors Motion For Summary Judgment (Lawsuit #3)

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Case 1:10-cv-00751-ABJ Document 13 Filed 06/08/11 Page 1 of 74

Case 1:10-cv-00751-ABJ Document 13 Filed 06/08/11 Page 2 of 74

Case 1:10-cv-00751-ABJ Document 13-8 Filed 06/08/11 Page 2 of 6

Case 1:10-cv-00751-ABJ Document 13-10 Filed 06/08/11 Page 5 of 7

Case 1:10-cv-00751-ABJ Document 13-10 Filed 06/08/11 Page 6 of 7

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