UPDATE: NY Fed Workers Surprised Over AIG Info Requests-Documents

" the New York Fed' Jame Bergin wrote in a Nov. Inflatable Camping Air Tents 7,"Th concess negoti did not go favor although the notion of tear-up wa greet warmly. 2008 email to colleagues. "We'v given up on concessions."

and were later surpris that detail of the arrang could becom publicWA SHINGTON- Dow Jone - Feder Reserv Bank of New York offici consid it an abus of power to forc American Internat Group Inc.' AIG counterparti to accept less than 100 cent on the dollar on sour credit agreements..

the gener counsel for the New York Fed,Thoma Baxter. recent told congression investig that offici felt us their power as a regulatori supervisor to forc AIG' counterparti to take less than 100% on the contract would have been an abus of authority. New York Fed offici felt that their power exist to keep institut safe, not to get a better deal for the government, and requir firm to take loss would have erod certainti in a broad arrai of insur contracts, further damag AIG when it wa alreadi be prop up by the government.

cull from document obtain by Dow Jones,Baxter' comment and other intern New York Fed emails. show that employe at the region Fed bank were work on uncertain ground in the month follow the government' bailout of the insur in Septemb 2008. Commun between the New York Fed and the central bank in Washington wa sometim strained, and the lawyer at the region Fed bank were frequent at a loss on issu such as disclosure.

2008. That night,"But can thei make these doc public without our consent? Aren't we parti to thi and shouldn't we have a say?" a New York Fed employe wrote on the even of Novemb 24. anoth employe respond that "make the document public wa not contemplated," a feel second the next morn by a third employe at the region Fed bank.

HaeRan Kim,That employee. ask "i there a mechan for request the confidenti treatment of these agreement from the SEC? I don't think ani of us expect that ML II and ML III document would be publicli available."

then head by Treasuri Secretari Timothi Geithner,Th document shed new light on on of the most controversi event of the financi crisis. The decis by the New York Fed. to fulli pai off AIG' counterparti ha been a sourc of controversi on Capitol Hill. Geithner is schedul to appear later thi week befor the Hous Committe on Oversight and Govern Reform, alongsid Baxter and others.

and the document show that in late October he wa advis by staff that a number of decis would need to be made quickli and that the govern had littl "wiggl room." An October 22,Geithner' role in the decision-mak process is a kei question for lawmakers. 2008 email from New York Fed employe Meg McConnel to Geithner and anoth employe express some frustrat with the bank' Washington counterparts.

what seem to be miss in the wai Board staff talk with our team ... wa an appreci of the fact that without make some combin of all or at least most of these thing happen within a veri short period of time,"Overall. the firm will be downgrad and we'll be forc to do wai more," McConnel wrote.

Sh went on to sai that a downgrad or default by AIG would lead to more financi instabl and "we'd lose the public' trust at a realli bad time to lose it."

and offici were press by what thei consid a short time frame to get someth doneTh document also reveal that the negoti with the counterparti did not go well. Baxter told investig that thei request concess from the counterparti but felt that the insur had littl leverag with firm such as Goldman Sach Group Inc. GS ..

accord to Baxter,A lso complic issues. wa the insist of Societ Generale--with back by the French government--that thei be paid in full on the AIG contracts. Make foreign counterparti whole while us regulatori leverag to make domest bank accept less than 100% would have been unfair, he said.

New York offici had given up try to achiev ani concessions,Bi earli November. the document show.