Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

They initially told us that they would take up to the face value of the collateral, and we quickly determined that that is not consistent with Federal Reserve policy. In point of fact, it is not consistent with the written agreement that the Reserve Banks have with the FDIC, which actually states that the FDIC will compensate us for the market value of the collateral. So I think that the FDIC here faces a sequence of failures and wants our cooperation. They did compensate us—we had $500 million outstanding to IndyMac at the moment it failed, and we were immediately compensated. But our agreement with the FDIC is that they compensate us only up to the market value of the collateral, which we deemed to be close to $1 billion, rather than our haircutted value based on a standard haircut, which was over $3 billion.

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