House panel probes AIG bailout

Geithner, 48, told members of the House Oversight and Government Reform Committee that the $700 billion Temporary Asset Relief Program was necessary for stopping a meltdown of the financial system in 2008. He also said he "withdrew from monetary policy decisions" involving American International Group Inc., which used an $85 billion bailout to pay off debts to large banks at full value with little evidence to suggest the Fed pushed for more favorable terms.

Geithner was president of the New York Federal Reserve Bank when the deal was made, The New York Times reported.

Rep. Dan Burton, R-Ind., told Geithner at one point, "it stretches credulity for us to believe that you had no role in this. You were the head of the Fed and didn't know anything about it? It just doesn't make sense to me."

The New York Fed's attorney Thomas Baxter explained the Fed advised AIG to remove narrative descriptions of the deal from a regulatory filing, because the numbers in the report were more accurate and told the same story, the Times said.

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