NEW YORK (TheStreet) -- Hours after Lehman Brothers tumbled into history as the largest bank failure in U.S. history, Federal Reserve Chairman Ben Bernanke's concerns focused elsewhere.
Opening remarks on Sept. 16, 2008, according to transcripts released by the central bank on Friday, revealed that Bernanke and members of the Fed's policy-making wing -- the Federal Open Market Committee -- were uncertain how the Lehman bankruptcy would affect the broader economic system.
As part of regular procedure: the committee received a briefing on the latest economic and financial updates, which included the Lehman fall, and Bernanke then asked the presidents of the regional Federal Reserve banks to offer their latest assessments.
This is the story of what unfolded.
Bernanke started the meeting late, sometime after 8 a.m. Eastern time, and with his opening remarks said concerns were increasing about insurance giant American International Group (AIG).
Then-Vice Chairman Timothy Geithner didn't attend the meeting that day because he was busy addressing the problems AIG faced and the risks the company posed to the financial system.
As the first order of duty, the manager of the System Open Market Account, William Dudley, recounted the latest economic changes. While Lehman received a bit of attention, Dudley detailed the reasons the Fed worried about AIG.
"The risk here, of course, is that, if AIG were to fail, money funds have even a broader exposure to them than to Lehman, and so breaking the buck on the money market funds is a real risk," Dudley said.