Today's letter from Ben Bernanke to the GAO stating that the Fed would "welcome a full review by GAO of all aspects of our involvement in the extension of credit to AIG" is a step in the right direction. Importantly, the letter also indicates that the Fed "will make available to the GAO all records and personnel necessary to conduct the review."
A key set of records, which should be made available publicly, are the minutes of the Federal Reserve Board meeting, or meetings, where the decision to bailout AIG was made, along with the Board staff analysis relating to that decision. A full review would also require release of information (perhaps minutes from other Board meetings) where the decision not to extend credit for Lehman was made--a decision made just two days before. According to press accounts, and to Sorkin's book Too Big Too Fail, the AIG bailout was recommended to the Board by Timothy Geithner, who was then president of the New York Fed, but who was not, of course, a member of the Board. There is now much debate and conflicting testimony about the nature and even the existence of the systemic risk which is currently cited as a factor in the Board's decision.
In keeping with the spirit of letter sent today, there is no reason why the Board should not regularly release detailed minutes of such crucial meetings just as the Federal Open Market Committee does. Currently, the only minutes available for those Board meetings that involved the "unusual and exigent circumstances" clause were for the March 14, 2008 and March 16, 2008 meetings, which related to Bear Stearns. The Board released these on June 27, 2008, three months after the meetings took place, but it has not released minutes from the Board meeting on AIG or related meetings of more than a year ago.
There is a stark contrast between the relatively high degree of transparency of FOMC decisions and the lack of transparency of Board decisions. To see this, compare the most recent FOMC minutes with the Board minutes of March 2008 cited here, or with no minutes at all. Increasing the transparency of the Board meetings to the level of the FOMC meetings would improve public discourse on these important decisions.