Proprietary Business Information
October 26, 2001

Comments on Findings and Conclusions for the Retail Swaps Study

Pat Parkinson, Pat White, Joyce Hansen, and Diane Virzera

General comments

{(b)(4) , (b)(5)]

01790

01200000000446


RETAIL SWAPS

TENTATIVE INTERVIEW AGENDA (as of 7/12/01)
AUGUST 1 & 2, 2001

Wednesday, August 1S¢

8:15 -9 am. Breakfast (Collaborative Room)

9- 10:30 a.m. JPM Chase (Legal Main Conference Room)

11 - 12:30 p.m. Refco (Legal Main Conference Room)

12:30 -2 p.m. Lunch (11 Dining Room A)

2-3:30 p.m. ISDA (Legal Main Conference Room)

3:30 - 4 p.m. Snacks (Collaborative Space)

4- 5:30 p.m. Morgan Stanley (Legal Main Conference Room)

Thursday, August 2nd

8:15 -9am. Breakfast (Collaborative Room)

9- 10:30 a.m. Enron (Legal Main Conference Room)

11 - 12:30 p.m. Goldman Sachs (Legal Main Conference Room)
12:30 - 2 p.m. Lunch (Legal Main Conference Room)

2-3:30 p.m.

3:30 - 4 p.m. Snacks (Collaborative Space)

4-5:30 p.m.

01400000000014


Adelina.Bonanno@ny. To: blaineb@sec.gov, bzwirb@cftc.gov, dwall@fdic.gov, efox@cftc.gov,

frb.org heidilynne.schultheiss@do.treas.gov, joyce.hansen@ny.frb.org,
kathryn.dick@occ.treas.gov, abrill@cea.eop.gov,
07/18/01 04:31 PM kurt.withelm@occ.treas.gov, Isantamorena@bpd.treas.gov,

matthew.eichner@do.treas.gov, mbrowne@fdic.gov,
nazaretha@sec.gov, norman.carleton@do.treas.gov,
patrick.m.parkinson@frb.gov, polisej|@sec.gov, pwhite@frb.gov
cc: Bob.Gasperini@ny.frb.org, Adelina.Bonanno@ny.frb.org
Subject: Retail Swaps Interview Participants

In order to finalize arrangements for the Interviews, it will be necessary
to have a preliminary head count for each day. Therefore, please forward a
listing of participants that will be attending from each institution by
noon on Friday, 7/20. In addition, please confirm who will be attending
the interviews from your agency.

Attached is the tentative agenda for both dates. Should you have any
changes or questions, please feel free to contact Bob Gasperini at (212)

720 -5263 or myself.
Thank you for your cooperation in this matter.

(See attached file: Retail Swaps Interview Agenda_#75036.DOC)

adelina.bonanno@ny.frb.org
Phone: (212) 720-5458
Fax: (212) 720-1756

Retail Swaps Interview Agenda_#75036.DOC

01400000000010


{(b)(5)]

Specific comments

{(b)(5)]

01400000000019


Lorie Logan, Olivia Padilla, and Mike Schetzel
November 8, 2001

Markets Group, Government Securities Staff
(212) 720-1475, 1519, and 2153

Enron Asset Prices Plummet [(b)(5)]

¢ Enron share and debt prices have declined sharply following revelations that its shareholder’s equity dropped
significantly and the SEC opened a formal investigation into transactions between Enron and the partnerships

headed by its former CFO.

*  [(b)(4) , (b)(5)]

* [(b)(4) , (b)(5)]

Enron’s asset prices have declined significantly since mid-October, when Enron first disclosed a $618 million third-
quarter loss and a $1.2 billion reduction in shareholder’s equity. Additionally, the announcement that the SEC would
be conducting a formal investigation of Enron's related-party transactions, as well as the subsequent downgrades to two

notches above junk status by Moody’s and S&P further weighed on investor confidence. [(b)(4)]

Enron’s share price has declined over 65 percent since mid-October, and is currently trading below $10 per

share for the first time in 9 years.

{ Enron's Share Price Declines Sharply,
Underperforming the Broader S&P Index

S&P Gas Subindex (left scale)

1200 }——
‘S&PS500 Index (left scale)

1-May 15-Jun 30-Jul 13-Sep

° {(b)(5)]

$100

01471

01200000000125


RETAIL SWAPS
TENTATIVE INTERVIEW AGENDA (as of 7/12/01)
AUGUST 1 & 2, 2001

Wednesday, August 15¢

8:15 -9am. Breakfast (Collaborative Room)

9 - 10:30 a.m. JPM Chase (Legal Main Conference Room)

11 - 12:30 p.m. Refco (Legal Main Conference Room)

12:30-2 p.m. Lunch (11h Dining Room A)

2.-3:30 p.m. ISDA (Legal Main Conference Room)

3:30 - 4 p.m. Snacks (Collaborative Space)

4 - 5:30 p.m. Morgan Stanley (Legal Main Conference Room)
Thursday, August 204

8:15 -9 am. Breakfast (Collaborative Room)

9 - 10:30 a.m. Enron (Legal Main Conference Room)

11 - 12:30 p.m. Goldman Sachs (Legal Main Conference Room)
12:30 - 2 p.m. Lunch (Legal Main Conference Room)

2 - 3:30 p.m.

3:30 - 4 p.m. Snacks (Collaborative Space)

4-5:30 p.m.

01400000000028


Diane.Virzera@ny.frb. To: blaineb@sec.gov, bzwirb@cftc.gov, dwall@fdic.gov, efox@cftc.gov,

org heidilynne.schultheiss@do.treas.gov, joyce.hansen@ny.fro.org,
kathryn.dick@occ.treas.gov, abrill@cea.eop.gov,
07/12/01 04:28 PM kurt.wilhelm@occ.treas.gov, |santamorena@bpd.treas.gov,

matthew.eichner@do.treas.gov, mbrowne@fdic.gov,
nazaretha@sec.gov, norman.carleton@do.treas.gov,
patrick.m.parkinson@frb.gov, polise|@sec.gov, pwhite@frb.gov
cc; Adelina.Bonanno@ny frb.org, Bob.Gasperini@ny frb.org
Subject: Tentative Interview Agenda

We have received responses from six institutions, all of which are
available on Wednesday 8/1 and Thursday 8/2. Attached to this e-mail is a
tentative agenda, which schedules each of these institutions in certain
time slots that accommodate any expressed preferences. Two time slots in
the afternoon of August 2nd are still open, with the possibility of being
filled by two of the following: Bank of America, Deutsche Bank, Lehman.
These institutions have not yet confirmed their availability. AIG
declined to participate. eae

In order to finalize the agenda and make appropriate arrangements, would
each agency please do the following:

1. I£ any scheduled time does not look good off the bat, advise me of this
by tomorrow (Friday 7/12) so I can issue a revised tentative schedule

tomorrow. Please proceed next week to confirm the availability of your
sponsored institution on the basis of the attached schedule (unless I issue
a revision tomorrow) . Going forward, keep in mind that changing scheduled

times would be complicated because this will involve making adjustments for
other institutions as well. The cover letter I previously distributed,
which also is attached for your convenience, should be sent before or after
you confirm the scheduled time with the sponsored institution, along with
the questionnaire once it is finalized.

2». Forward the following information to the attention of Bob Gasperini
(bob.gasperinieny.frb.org) and Adelina Bonanno
(adelina.bonanno@ny.frb.org), who are also cc'd on this e-mail:

a. Names of your agency representatives who will attend the
meetings

b. Confirmation that your sponsored institution has been advised of
the scheduled time and is available, along with the names of the
representatives of the sponsored institution who will attend the meeting

Some other details:

--Each meeting will need a lead interviewer and a minute taker who will
take notes and distribute them to the rest of the working group . Each
agency sponsoring the interview should arrange for the lead interviewer.
In order to share the burden of minute-taking, I propose that each agency
representative coming to New York volunteer to be minute taker for one
meeting. On the morning of 8/1, a sign-up list for minute takers will be
available.

--I will be out of the office starting Monday July 16th and will return
Monday July 30th. In my absence, Bob Gasperini (Paralegal, Ph:
212-720-5263) and Adelina Bonanno (Assistant, Ph: 212-720-5458) will
receive your information and finalize the agenda. Please contact either of
them with administrative questions.

--Regarding Bank of America, Deutsche Bank, and Lehman -- Belinda Blaine
and Kurt Wilhelm, let's try to reach resolution tomorrow on which of these
institutions will be in the first round of interviews. I expect to hear

01400000000026


dei Bonaogny Fe

Wednesday, July 18, 6200142 :32 PM

blaineb@sec.gov, bzwii gov; dwall@fdic.gov; efox@cfte.gov;

heidilynne.: siuless@uo es teas 9 joyce.hansen@ny.frb.org; kathryn, dick@occ.treas.gov;
e ma@oce We

abril eop.gov; kurt. treas.gov; Isantamorena@bpd.treas.gov;
matthew.eichner@do.treas.gov; mbrown: ic.gov; nazaretha@sec.gov;
pallet neo lo.treas.gov; patrick.m.parkinson@frb.gov; polisei@sec.gov;
ite
Ce: Bob. Gaspenni@ny. frb.org; Adelina. Bonanno@ny frb.org
Subject: Retail Swaps Interview Paiticipants
Reta! Swaps interview
Agenda_ In order to finalize arrangements for the Interviews, it will be necessary

to have a preliminary head count for each day. Therefore, please forward a
listing of participants that will be attending from each institution by
noon on Friday, 7/20. In addition, please confirm who will be attending
the interviews from your agency.

Attached is the tentative agenda for both dates. Should you have any
changes or questions, please feel free to contact Bob Gasperini at (212)
720 -5263 or myself.

Thank you for your cooperation in this matter.
(See attached file: Retail Swaps Interview Agenda_#75036.DOC)
adelina.bonanno@ny. frb.org

Phone: (212) 720-5458
Fax: (212) 720-1756

01243

01200000000599


FORM LETTER FROM FEDERAL AGENCY SPONSORING INTERVIEW
[Insert Addressee]
Dear z

The purpose of this letter is to request your participation in a study required by the Commodity
Futures Modemization Act of 2000 (“CFMA”). Section 105(c) of the CFMA directs the Board of
Govemors of the Federal Reserve System, the Secretary of the Treasury, the Commodity Futures Trading
Commission, and the Securities and Exchange Commission to conduct a study of issues involving the
offering of swap agreements to parties other than eligible contract participants. The Federal Deposit
Insurance Corporation, Federal Reserve Bank of New York and Office of the Comptroller of the Currency
also are taking part in the study.

Each federal agency will sponsor interviews of certain of its supervised or regulated institutions,
as well as other potentially interested parties. The topics of these interviews are enclosed with this letter
and present the questions that a (specify agency sending lender] representative would raise at a meeting
should your institution decide to participate. A small number of representatives from other federal
agencies also would attend the meeting.

Your responses would be summarized with responses from other institutions in a report to
Congress without disclosing your individual responses. The federal agencies would consider your
responses during the mecting to be confidential (unless already in the public domain) and will not disclose
your individual responses unless required to do so under applicable law.

If your institution agrees to participate in the study, please contact the undersigned to confirm
your availability for a meeting on [insert relevant date and time from 7/12/01 tentative agenda]. The
meeting will take place at the Federal Reserve Bank of New York at 33 Liberty Street (Seventh Floor).
Thank you for your attention.

01400000000015


Kosmides, Ivy

From: Bryan G. [(b)(6)]

Sent: Thursday, September 20, 2001 12:47 PM
To: Ivy.Kosmides@do.treas.gov

Subject: RE: DR ICERC

Ivy,

thats great. i would like to know the total amount of

arrears due to all the power producers if possible.
Specifically, in Enron's case - have the authorities
made any overtures regarding payment of arrears; are
current invoices being paid; what portion of current
arrears represent accumulated interest on past due

amounts.

As always, thanks.

-Bryan
--- Ivy.Kosmides@do.treas.gov wrote:

VVVVVVV VV VV VV VV VV

Bryan,

I just found out I will also be able to meet with
the VP of ENRON, one of

the big companies that is owed money. State just
told me "ENRON's creditors

are due $31 million in December and unless the GODR
pays up, it will be in

default. The company is considering taking the GODR
to international

arbitration as per the contract. [(b)(5)]

Hopefully I will be able to discern the real story.
Let me know if you have

specific questions. I will send you my write-up
Tuesday evening.

Ivy

-----Original Message-----

From: Bryan G. [{mailto:[(b)(6)]

Sent: Wednesday, September 19, 2001 11:04 PM
To: Ivy.Kosmides@do.treas.gov

Subject: Re: DR ICERC

Thanks Ivy.

I look forward to hearing anything you find out. [I
have heard that the government has made an offer to
pay back some portion of the arrears, but the
details

I have are pretty sketchy, and probably it's not an
acceptable offer to the utilities. Anything you
find

out would be extremely helpful.

Sincerely,

Bryan

00500000001846


{(b)()}

{(b)(4)]

* — [(b)(4) , (b)(5)]

[(b)(4) , (b)(5)]

. Shares of the large energy merchant companies such as E] Paso, Duke, and Dynegy are down 5 to 20 percent
since mid-October. {(b)(4)]

| Index, Global Energy Merchants’ Share Prices
/100=1/01/01

124

“Oct 22 Announcement
of SEC investigation

| 314

0
\-Jan 15-Feb 1-Apr 16-May 30-Jun 14-Aug 28-Sep

° {(b)(5)]

02905

. 01300000001514


[(b)(4), (©)(5)]

Specific comments

[(b)(4), (b)(5)]

01791

01200000000447


{(b)(4) , (b)(5)]

01200000001454


{(b)(4) , (b)(5)]

01793

01200000000449


[(b)(4)]

The CFTC also announced that it has no indication of futures markets disruptions involving Enron Trading
Services, Enron's registered futures commission merchant. [(p)(4)]

| Henry Hub Natural Gas Front-Month Futures Price
| Per Million Btu

a un u Se 2 Oct

*  [(b)(4)]

[(b)(4)]

Enron announced on Monday that trading volume for all products on the platform was about 6,500 transactions,
above the 30-day average of 5,800 transactions. However, energy merchant companies that compete with Enron,
including El Paso and Dynegy, have publicly noted an increase in business activity as investors concerns about Enron
have increased over the week.

Today, Dynegy and Enron confirmed earlier speculation that they are engaged in discussions about a possible
business combination, but did not release any terms of the potential transaction. [(b)(5)]
The 10-year bond is about 10

points higher than yesterday's lows at 75 cents on the dollar, while the equity price is little changed. After declining on
the news yesterday, Dynegy shares rose 11 percent [(b)(5)]

* Other primary trading platforms include DynegyDirect, Intercontinental Exchange (ICE), New York Mercantile
Exchange, and TradeSpark in addition to several smaller electronic trading systems.

01300000001515


{(b)(5)]

[(b)(4)]

* — [(b)(4) , (&)(5)]

{(b)(4) , (b)(5)]

. Shares of the large energy merchant companies such as E] Paso, Duke, and Dynegy are down 5 to 20 percent

since mid-October. [(b)(4)]

|roo=1/01101

124

Index, Global Energy Merchants’ Share Prices |

| ‘Oct. 22 Announcement
] of SEC investigation

O

t-Jan 15-Feb  1-Apr 16-May 30-Jun 14-Aug 28-Sep

*  [(b)(5)]

01540

01200000000194


Rao, Geetha

From: Mark.Choi@ny.frb.org
Sent: Thursday, April 26, 2001 11:22 AM
To: Geetha. Rao@do.treas.gov
Subject: Enron update
¥)
Inca update

42so1e Hi Geetha. Hope you're doing well. If you haven't heard already, Enron's
board yesterday authorized preliminary termination at any time. Here's the
little note I prepared for FRBNY internal distribution. Hope it's helpful.
(See attached file: India update 4-26-01.doc)
Mark

ps. please do not distribute to others. Thanks.

00500000002245


Norm, having reviewed Enron's proposed changes to the pending bankruptcy bill, | have the following comments.

((b)(5)]

Norm, feel free to call me to discuss further any of these comments.

02545

01300000001154


((b)(5)]

[(b)(4)]

° — [(b)(4) , (b)(S)]

{(b)(4) , (b)(5)]

. {(b)(4)]

| index, Global Energy Merchants’ Share Prices
|100=1/01701

‘Oct. 22 Announcement
of SEC investigation

nM

0
t-Jan 15-Feb 1-Apr 16-May 30-Jun 14-Aug 28-Sep

° ((b)(5)]

01300000000051


Kosmides, Ivy

From: Bryan.Gobin@ny.frb.org

Sent: Tuesday, September 25, 2001 6:35 PM
To: Ivy.Kosmides@do.treas.gov

Subject: RE: DR - Global bond usss00 mill

Great, thanks!

Ivy . Kosmides@do

.treas.gov To: Bryan.Gobin@ny.frb.org

ce:
09/25/2001 Subject: RE: DR - Global bond uS$500 mill
05:16 PM

Hi Bryan,
Thanks for the info. [(b)(5)]

Ivy

Original Message
From: Bryan.Gobin@ny.frb.org [mailto:Bryan.Gobin@ny.frb.org]
Sent: Tuesday, September 25, 2001 5:11 PM

To: Ivy.Kosmides@do.treas.gov

Subject: DR - Global bond US$s00 mill

Hi Ivy,

Sorry it took me so long to get back with you. [(b)(5)]

By chance, did Enron provide any new insights
to the power sector arrears? I also included a timeline below.

Cheers
-Bryan

September 20 - $500 million global bond issue
Launched $500 million global bonddespite the turmoil in the international
debt and equity markets. The launch date was postponed from September 11.

September 5 - S&P upgrades DR to BB- from B+

S&P raised its long-term local and foreign sovereign credit and senior debt
ratings to BB- from B+ and revised the outlooks on the ratings to stable.

August 29 - Moody's rating upgrade to Ba2 from Bl

July 2001
Congress gave its approval to a new global bond issue worth US$500 million.

June 12 - S&P upgrades LOCAL currency ratings
1

00500000001851


DVVVVVVVV¥V¥VV VV

-- Ivy.Kosmides@do.treas.gov wrote:

Hi Bryan,

I'm very impressed with the paper on the Domincan
Republic and have no

disagreements or changes to recommend.

I will be meeting with the State desk officer from
post on Tuesday next, and

have asked that they bring any updates they may
have

> access to, particularly

> on the pesky arrears to IPPs that we discussed

>
>
>
>
>
>
>
>

> month. I will let you
know as soon as possible if anything comes up.

Thanks,
Ivy

Terrorist Attacks on U.S. - How can you help?
Donate cash, emergency relief information

ttp://dailynews.yahoo.com/fc/US/Emergency_Information/

Terrorist Attacks on U.S. - How can you help?
Donate cash, emergency relief information
http: //dailynews .yahoo.com/fc/US/Emergency_Information/

00500000001847


{(b)(4)]

The CFTC also announced that it has no indication of futures markets disruptions involving Enron Trading
Services, Enron's registered futures commission merchant. [(b)(4)]

Henry Hub Natural Gas Front-Month Futures Price

Per Million Btu
$s

s1
| 1-May 45-Jun 30-Jul 13-Sep 28-Oct

*  [(h)(4)]

{(b)(4)]

Enron announced on Monday that trading volume for all products on the platform was about 6,500 transactions,
above the 30-day average of 5,800 transactions, However, energy merchant companies that compete with Enron,
including El Paso and Dynegy, have publicly noted an increase in business activity as investors concerns about Enron
have increased over the week.

Today, Dynegy and Enron confirmed earlier speculation that they are engaged in discussions about a possible
business combination, but did not release any terms of the potential transaction. [(b)(5)]

: The 10-year bond is about 10
points higher than yesterday's lows at 75 cents on the dollar, while the equity price is little changed. After declining on
the news yesterday, Dynegy shares rose 11 percent [(b)(5)]

‘ Other primary trading platforms include DynegyDirect, Intercontinental Exchange (ICE), New York Mercantile
Exchange, and TradeSpark in addition to several smaller electronic trading systems.

01200000000195


Rao, Geetha

Dee a eee

From: Mark.Choi@ny.frb.org

Sent: Tuesday, April 24, 2001 3:12 PM
To: Geetha.rao@do.treas.gov
Subject: Enron info.

Hi Geetha. I'm not sure you remember me but we spoke a few months ago about
the India ICERC paper I prepared. I wanted to touch bases with you to see

what you think about the ongoing Enron affair. Have you gotten any hints

out of India as to where this thing is headed? Last I heard there will be

an Enron board meeting tommorrow, as well as a lender meeting in London.
The wires are reporting that preliminary termination of the first phase

project will be on the agenda. Do you have any information about this, what

the status of the second phase is, and what's going on with the

conciliation talks (if they haven't been already shelved for arbitration).

I'd appreciate any insight you might have.
Thanks,

Mark

00500000002244


RETAIL SWAPS
TENTATIVE INTERVIEW AGENDA (as of 7/18/01)
AUGUST 1 & 2, 2001

Wednesday, August 1"

8:15 -9 am. Breakfast (Collaborative Room)

9- 10:30 a.m. JPM Chase (Legal Main Conference Room)

11 - 12:30 p.m. Refco (Legal Main Conference Room)

12:30 - 2 p.m. Lunch (11" Dining Room A)

2 - 3:30 p.m. Bank of America (Legal Main Conference Room)
3:30 -4 p.m. Snacks (Collaborative Space)

4-5:30 p.m. Morgan Stanley (Legal Main Conference Room)
Thursday, August 2°

8:15 -9 a.m. Breakfast (Collaborative Room)

9 - 10:30 a.m. Enron (Legal Main Conference Room)

11 - 12:30 p.m. Goldman Sachs (Legal Main Conference Room)
12:30 - 2 p.m. Lunch (Legal Main Conference Room)

2 - 3:30 p.m. ISDA (Legal Main Conference Room)

3:30-4 p.m. Snacks (Collaborative Space)

4 - 5:30 p.m. Lehman Bros. (Legal Main Conference Room)*

* Will be arriving at 4:15 p.m.

01244

01200000000600


Donovan, Meg

From: Robert.Elsasser@ny.frb.org
Sent: Thursday, November 08, 2001 3:58 PM
To: andrew.jewell@do.treas.gov; anna.corfield@do.treas.gov; brian.roseboro@do.treas.gov;

gregory.berger@do.treas.gov; james.sharer@do.treas. gov; jeff.huther@do.treas.gov;
jill.cetina@do.treas. gov; joe.engelhard@do.treas.gov; john.ralyea@do.treas.gov;
john.taylor@do.treas.gov; kathleen.byrne@do.treas.gov; ken.dam@do.treas.gov;
lois.quinn@do.treas.gov; mark.sobel@do.treas.gov; meg.donovan@do.treas.gov;
paul.malvey@do.treas.gov; paul.o'neill@do.treas.gov; peter.fisher@do.treas.gov;
ramin.toloui@do.treas.gov; shirley.gathers@do.treas.gov; suzanne.boughner@do.treas.gov;
tim.adams@do.treas. gov; tim.dulaney@do.treas.gov; troy.wray@do.treas.gov

Subject: Enron Update

7)

Enron.doc
Enron requires little introduction. The following analysis written by
Lorie Logan, Olivia Padilla and Mike Schetzel summarizes the blow to the
debt and equity prices of Enron and other energy companies, and also
examines the impact thus far on the energy trading markets.

(See attached file: Enron.doc)
Bob Elsasser
Government Securities, FRBNY

robert .elsasser@ny.frb.org
212.720.1234

00500000000468


{(b)(5)]

01400000000021


Rao, Geetha

———————— 0°06€O0©_,bg§CIC.eaQ@&,”

From: Rao, Geetha

Sent: Thursday, April 26, 2001 11:34 AM
To: *Mark.Choi@ny.frb.org"

Subject: RE: Enron update

Thanks. This is excellent. I would also add to the first line of the first bullet the following:

{(b)(5)]

Our meeting with the Indians has been postponed to an undetermined time this weekend. I will most likely
get back to you early next week to give you a readout on any Enron-related matters.

We will be in touch.

Thanks, Geetha

-----Original Message—

From: Mark.Choi@ny.frb.org [mailto:Mark.Choi@ny.frb.org]
Sent: Thursday, April 26, 2001 11:22 AM

To: Geetha.Rao@do.treas.gov
Subject: Enron update

Hi Geetha. Hope you're doing well. If you haven't heard already, Enron's
board yesterday authorized preliminary termination at any time. Here's the
little note I prepared for FRBNY internal distribution. Hope it's helpful.
(See attached file: India update 4-26-01.doc)

Mark

ps. please do not distribute to others. Thanks.

00500000002247


{(b)(5)]

00500000002246


Proprietary Business Information

October 26, 2001

Comments on Findings and Conclusions for the Retail Swaps Study
Pat Parkinson, Pat White, Joyce Hansen, and Diane Virzera

General comments

{(b)(5)]

01400000000017


From: ex.mail.”Eric.Foster@ny.frb.org”

To: ex.mail("Norman,Carleton"),DOM3.00PO6(CARLETONN)
Date: 6/2/99 8:38am
Subject: Fwd: comments

see attached comments

02544

01300000001153


{(b)(5)]

01400000000022


{(b)(4)]

The CFTC also announced that it has no indication of futures markets disruptions involving Enron Trading
Services, Enron’s registered futures commission merchant. [(b)(4)]

Henry Hub Natural Gas Front-Month Futures Price
| Per Million Btu

s — [(b)(4)]

{(b)(4)]

Enron announced on Monday that trading volume for all products on the platform was about 6,500 transactions,
above the 30-day average of 5,800 transactions. However, energy merchant companies that compete with Enron,
including El} Paso and Dynegy, have publicly noted an increase in business activity as investors concerns about Enron
have increased over the week.

Today, Dynegy and Enron confirmed earlier speculation that they are engaged in discussions about a possible
business combination, but did not release any terms of the potential transaction. [(b)(5)] .

. The 10-year bond is about 10
points higher than yesterday's lows at 75 cents on the dollar, while the equity price is little changed. After declining on
the news yesterday, Dynegy shares rose 11 percent [(b)(5)]

‘ Other primary trading platforms include DynegyDirect, Intercontinental Exchange (ICE), New York Mercantile
Exchange, and TradeSpark in addition to several smaller electronic trading systems.

01300000000052


S&P raised its long-term and short-term LOCAL currency sovereign credit
ratings to B+/B from SD/SD (selective default) and its short-term foreign
crrency credit rating to B from C. It affirmed its B+ long-term sovereign
credit and senior debt ratings and revised both rating outlooks to
positive.

May 21 - Moody's changes rating outlook to positive

Moody's changes its ratings outlook to positive for DR's Bl
foreign-currency country ceiling for bonds and notes, as well as for the B2
foreign-currency country ceiling for bank deposits

00500000001852


{(b)(4) , (b)(5))

01792

01200000000448


Diane.Virzera@ny.frb. To: Diane.Virzera@ny.frb.org

org cc: abrill@cea.eop.gov, Adelina.Bonanno@ny.frb.org, blaineb@sec.gov,
Bob.Gasperini@ny.frb.org, bzwirb@cftc.gov, dwall@fdic.gov,
07/13/01 04:50 PM efox@cftc.gov, heidilynne.schultheiss@do.treas.gov,

joyce.hansen@ny.frb.org, kathryn.dick@occ.treas.gov,

kurt.wilhelm@occ.treas.gov, Isantamorena@bpd.treas.gov,

matthew.eichner@do.treas.gov, mbrowne@fdic.gov,

nazaretha@sec.gov, norman.carleton@do.treas.gov,

patrick.m.parkinson@frb.gov, polisej|@sec.gov, pwhite@frb.gov
Subject: Re: Tentative Interview Agenda

This e-mail is to confirm that the tentative agenda has not changed as of
today, and you can proceed to have the cover letters and final questionaire
delivered to your sponsored institutions.

diane. virzera@ny.frb.org
Ph: 212-720-7798
Fax: 212-720-1756

Diane Virzera

To: Retail Swaps
07/12/2001 cc: Adelina Bonanno/NY/FRS@NY,
Bob Gasperini/NY/FRS@NY
04:28 PM Subject: Tentative Interview
Agenda

We have received responses from six institutions, all of which are
available on Wednesday 8/1 and Thursday 8/2. Attached to this e-mail is a
tentative agenda, which schedules each of these institutions in certain
time slots that accommodate any expressed preferences. Two time slots in
the afternoon of August 2nd are still open, with the possibility of being
filled by two of the following: Bank of America, Deutsche Bank, Lehman.
These institutions have not yet confirmed their availability. AIG
declined to participate.

Tn order to finalize the agenda and make appropriate arrangements, would ~
each agency please do the following:

1. If any scheduled time does not look good off the bat, advise me of this
by tomorrow (Friday 7/12) so I can issue a revised tentative schedule

tomorrow. Please proceed next week to confirm the availability of your
sponsored institution on the basis of the attached schedule (unless I issue
a revision tomorrow). Going forward, keep in mind that changing scheduled

times would be complicated because this will involve making adjustments for
other institutions as well. The cover letter I previously distributed,
which also is attached for your convenience, should be sent before or after
you confirm the scheduled time with the sponsored institution, along with
the questionnaire once it is finalized.

cia Forward the following information to the attention of Bob Gasperini
(bob.gasperini@ny.frb.org) and Adelina Bonanno
(adelina.bonanno@ny.frb.org), who are also cc'd on this e-mail:

a. Names of your agency representatives who will attend the
meetings

01400000000012


b. Confirmation that your sponsored institution has been advised of
the scheduled time and is available, along with the names of the
representatives of the sponsored institution who will attend the meeting

Some other details:

--Each meeting will need a lead interviewer and a minute taker who will
take notes and distribute them to the rest of the working group . Each
agency sponsoring the interview should arrange for the lead interviewer.
In order to share the burden of minute-taking, I propose that each agency
representative coming to New York volunteer to be minute taker for one
meeting. On the morning of 8/1, a sign-up list for minute takers will be
available.

--I will be out of the office starting Monday July 16th and will return
Monday July 30th. In my absence, Bob Gasperini (Paralegal, Ph:
212-720-5263) and Adelina Bonanno (Assistant, Ph: 212-720-5458) will
receive your information and finalize the agenda. Please contact either of
them with administrative questions.

--Regarding Bank of America, Deutsche Bank, and Lehman -- Belinda Blaine
and Kurt Wilhelm, let's try to reach resolution tomorrow on which of these
institutions will be in the first round of interviews. I expect to hear
from Deutsche Bank tomorrow.

--Breakfast, lunch, and afternoon snacks will be provided to agency
representatives on both days.

Thanks for your cooperation.

Regards,
Diane Virzera

(See attached file: Retail Swaps Interview Agenda_#75036.DOC) (See attached
file: Form letter for retail swap survey_#74404.DOC)

diane.virzera@ny.frb.org
Ph: 212-720-7798
Fax: 212-720-1756

- Retail Swaps Interview Agenda_#75036.D0C —_—___--— =

a - Form letter for retail swap survey_#74404.D0C

01400000000013


FORM LETTER FROM FEDERAL AGENCY SPONSORING INTERVIEW
[Insert Addressee]
Dear :

The purpose of this letter is to request your participation in a study required by the Commodity
Futures Modernization Act of 2000 (“CFMA”). Section 105(c) of the CFMA directs the Board of
Govemors of the Federal Reserve System, the Secretary of the Treasury, the Commodity Futures Trading
Commission, and the Securities and Exchange Commission to conduct a study of issues involving the
offering of swap agreements to parties other than eligible contract participants. The Federal Deposit
Insurance Corporation, Federal Reserve Bank of New York and Office of the Comptroller of the Currency
also are taking part in the study.

Each federal agency will sponsor interviews of certain of its supervised or regulated institutions,
as well as other potentially interested parties. The topics of these interviews are enclosed with this letter
and present the questions that a [specify agency sending lender] representative would raise at a meeting
should your institution decide to participate. A small number of representatives from other federal
agencies also would attend the meeting.

Your responses would be summarized with responses from other institutions in a report to
Congress without disclosing your individual responses. The federal agencies would consider your
responses during the meeting to be confidential (unless already in the public domain) and will not disclose
your individual responses unless required to do so under applicable law.

If your institution agrees to participate in the study, please contact the undersigned to confirm
your availability for a meeting on [insert relevant date and time from 7/12/01 tentative agenda]. The
meeting will take place at the Federal Reserve Bank of New York at 33 Liberty Street (Seventh Floor).
Thank you for your attention.

01400000000029


Carleton, Norman

$$
From: Carleton, Norman

Sent: Thursday, November 08, 2001 4:31 PM
To: Schultheiss, Heidilynne; Nickoloff, Peter
Subject: FW: Enron Update

Enron doe

+++ Original Message-----

Prom: Roseboro, Brian

Sent: Thursday, November 08, 2001 4:13 PM

To: Carleton, Norman; Clarida, Richard

Cc: Randall_S. _Kroszner (E-mail); Kmalmgre (E-mail)
Subject: FW: Enron Update

=---- Original Message-----

From: Robert .Elsasser@ny.frb.org (mailto:Robert .Elsasser@ny.frb.org)
Sent: Thursday, November 08, 2001 3:58 PM

To: andrew. jewell@do.treas.gov; anna.corfield@do.treas.gov;
brian.roseboro@do.treas.gov; gregory.berger@do.treas.gov;
james .sharer@do.treas.gov; jeff.huther@do.treas.gov;
jill.cetina@do.treas.gov; joe.engelhard@do.treas.gov;
john.ralyea@do.treas.gov; john.taylor@do.treas.gov;
kathleen.byrne@do.treas.gov; ken.dam@do.treas.gov;
lois.quinn@do.treas.gov; mark.sobel@do.treas.gov;
meg.donovan@do.treas.gov; paul.malvey@do.treas.gov;
paul.o'neillédo.treas.gov; peter. fisher@do.treas.gov;
ramin.toloui@do.treas.gov; shirley.gathers@do.treas.gov;
suzanne .boughner@do.treas.gov; tim.adams@do.treas.gov;
tim.dulaney@do.treas.gov; troy.wray@do.treas.gov

Subject: Enron Update

Enron requires little introduction. The following analysis written by
Lorie Logan, Olivia Padilla and Mike Schetzel summarizes the blow to the
debt and equity prices of Enron and other energy companies, and also
examines the impact thus far on the energy trading markets.

(See attached file: Enron.doc)

Bob Elsasser

Government Securities, FRBNY
robert .elsasser@ny.frb.org
212.720.1234

Tracking: Recipient Delivery Read
ce don ra d
coo Ff td qd

01300000000049


{(b)(4)]

The CFTC also announced that it has no indication of futures markets disruptions involving Enron Trading
Services, Enron’s registered futures commission merchant. [(b)(4)]

Henry Hub Natural Gas Front-Month Futures Price

Per Million Btu
$5

$3

$2

St
1-May 15-Jun 30-Jul 13-Sep 28-Oct

= [(b)(4)]

{(b)(4)]

Enron announced on Monday that trading volume for all products on the platform was about 6,500 transactions,
above the 30-day average of 5,800 transactions. However, energy merchant companies that compete with Enron,
including El Paso and Dynegy, have publicly noted an increase in business activity as investors concerns about Enron
have increased over the weck.

Today, Dynegy and Enron confirmed earlier speculation that they are engaged in discussions about a possible
business combination, but did not release any terms of the potential transaction. [(b)(5)]

The 10-year bond is about 10
points higher than yesterday's lows at 75 cents on the dollar, while the equity price is little changed. After declining on
the news yesterday, Dynegy shares rose 1] percent [(b)(5)]

' Other primary trading platforms include DynegyDirect, Intercontinental Exchange (ICE), New York Mercantile
Exchange, and TradeSpark in addition to several smaller electronic trading systems.

00500000000471


{(b)(5)]

Specific comments

{(b)(5)]

01400000000020


Proprietary Business Information
October 26, 2001

Comments on Findings and Conclusions for the Retail Swaps Study
Pat Parkinson, Pat White, Joyce Hansen, and Diane Virzera

General comments

{(b)(5)]

01400000000018


((b)(5)}

[(b)(4)]

* — [(b)(4) , (b)(5)]

{(b)(4) , (b)(5)]

. Shares of the large energy merchant companies such as E] Paso, Duke, and Dynegy are down 5 to 20 percent
since mid-October. [(b)(4)]

Index, Global Energy Merchants’ Share Prices
100=1/01/01

124
{ 2 Oct. 22 Announcement |
| of SEC investigation

62

Ho

°
teJan 15-Feb 1-Apr 16-May 30-Jun 14-Aug 28-Sep

° {(b)(5)]

01472

01200000000126


Lorie Logan, Olivia Padilla, and Mike Schetzel
November 8, 2001

Markets Group, Government Securities Staff
(212) 720-1475, 1519, and 2153

Enron Asset Prices Plummet [(b)(5)]

¢ Enron share and debt prices have declined sharply following revelations that its shareholder’s equity dropped
significantly and the SEC opened a formal investigation into transactions between Enron and the partnerships
headed by its former CFO.

*  [(b)(4) , (b)(5)]
* [(b)(4) , (b)(5)]

Enron’s asset prices have declined significantly since mid-October, when Enron first disclosed a $618 million third-
quarter loss and a $1.2 billion reduction in shareholder’s equity. Additionally, the announcement that the SEC would
be conducting a formal investigation of Enron's related-party transactions, as well as the subsequent downgrades to two
notches above junk status by Moody’s and S&P further weighed on investor confidence. [(b)(4)]

Enron's share price has declined over 65 percent since mid-October, and is currently trading below $10 per
share for the first time in 9 years.

| Enron's Share Price Declines Sharply,
Underperforming the Broader S&P Index

$100

‘S&P Gas Subindex (left scale)

| S8P500 index (left scale)

1-May 15-Jun 30-Jul 13-Sep 28-Oct |

*  [()(5)]

01539

01200000000193


{(b)(5)]

{((b)(4)]

*  [(b)(4) , (b)(5)]

{(b)(4) , (b)(5)]

. Shares of the large energy merchant companies such as El Paso, Duke, and Dynegy are down 5 to 20 percent
since mid-October. {(b)(4)]

' Index, Global Energy Merchants’ Share Prices

100=1/01/01
124

nv

o}

Oct, 22 Announcement
of SEC investigation

Duke

rab
BPaso *y

ron \

1-Jan 15-Feb

*  [(by(5)]

1-Apr 16-May 30-Jun 14-Aug 28-Sep

00500000000470


RETAIL SWAPS
TENTATIVE INTERVIEW AGENDA (as of 7/18/01)
AUGUST 1 & 2, 2001

Wednesday, August 1St

8:15-9am. Breakfast (Collaborative Room)

9- 10:30 a.m. JPM Chase (Legal Main Conference Room)

11 - 12:30 p.m. Refco (Legal Main Conference Room)

12:30 - 2 p.m. Lunch (11th Dining Room A)

2-3:30 p.m. Bank of America (Legal Main Conference Room)
3:30-4 p.m. Snacks (Collaborative Space)

4-5:30 p.m. Morgan Stanley (Legal Main Conference Room)
Thursday, August gnd

8:15 -9am. Breakfast (Collaborative Room)

9- 10:30 a.m. Enron (Legal Main Conference Room)

11 - 12:30 p.m. Goldman Sachs (Legal Main Conference Room)
12:30 - 2 p.m. Lunch (Legal Main Conference Room)

2 - 3:30 p.m. ISDA (Legal Main Conference Room)

3:30- 4 p.m. Snacks (Collaborative Space)

4-5:30 p.m. Lehman Bros. (Legal Main Conference Room)*

01400000000011


Fisher, Peter

From:
Sent:
To:
Subject:

((b)(4) , (b)(5)]

Dino.Kos@ny.frb.org

Friday, November 16, 2001 5:06 PM
peter.fisher@do.treas.gov

latest gossip

01200000001453


Lorie Logan, Olivia Padilla, and Mike Schetzel
November 8, 2001

Markets Group, Government Securities Staff
(212) 720-1475, 1519, and 2153

Enron Asset Prices Plummet [(b)(5)]

Enron share and debt prices have declined sharply following revelations that its shareholder’s equity dropped
significantly and the SEC opened a formal investigation into transactions between Enron and the partnerships
headed by its former CFO.

*  [(b)(4) , (b)(5)]

* [(b)(4) , (b)(5)]

Enron’s asset prices have declined significantly since mid-October, when Enron first disclosed a $618 million third-
quarter loss and a $1.2 billion reduction in shareholder’s equity. Additionally, the announcement that the SEC would
be conducting a formal investigation of Enron’s related-party transactions, as well as the subsequent downgrades to two
notches above junk status by Moody’s and S&P further weighed on investor confidence. [(b)(4)]

Enron’s share price has declined over 65 percent since mid-October, and is currently trading below $10 per
share for the first time in 9 years.

Enron's Share Price Declines Sharply,
Underperforming the Broader S&P Index

S&P Gas Subindex (left scale)

1200
S&PS500 index (left scale)

400 $25
0 $0
+-May 15-Jun 30-Jul 13-Sep 28-Oct
* — [(b)(5)]

00500000000469


{(b)(5)]

01400000000023


Lorie Logan, Olivia Padilla, and Mike Schetzel
November 8, 2001

Markets Group, Government Securities Staff
(212) 720-1475, 1519, and 2153

Enron Asset Prices Plummet [(b)(5)]

¢ Enron share and debt prices have declined sharply following revelations that its shareholder’s equity dropped
significantly and the SEC opened a formal investigation into transactions between Enron and the partnerships
headed by its former CFO.

* [(b)(4) , (6)(5)]
+ [(b)(4) , (b)(5)]

Enron’s asset prices have declined significantly since mid-October, when Enron first disclosed a $618 million third-
quarter loss and a $1.2 billion reduction in shareholder's equity. Additionally, the announcement that the SEC would
be conducting a formal investigation of Enron's related-party transactions, as well as the subsequent downgrades to two
notches above junk status by Moody’s and S&P further weighed on investor confidence. [(b)(4)]

Enron's share price has declined over 65 percent since mid-October, and is currently trading below $10 per
share for the first time in 9 years.

| Enron's Share Price Declines Sharply, |
| Underperforming the Broader S&P Index

S&P Gas Subindex (left scale)

Bn 02904

* —— [(b)(5)]

. 01300000001513


Norman.Carleton@do. To: Alexander_M._Brill@cea.eop.gov, donald.lamson@occ.treas.gov,
treas.gov dombalagiano@sec.gov, aamitchell@fdic.gov, nazaretha@sec.gov,
blaineb@sec.gov, colbyr@sec.gov, bzwirb@cftc.gov, dwall@fdic.gov,
10/26/01 03:12 PM diane.virzera@ny.frb.org, Matthew.Eichner@do.treas.gov,
efox@cftc.gov, eric.hirschhorn@ots.treas.gov,
Viva. Hammer@do.treas.gov, polise|@sec.gov,
joyce.hansen@ny frb.org, kathryn.dick@occ.treas.gov,
Kevin_F._Erickson@cea.eop.gov, kurt.wilhelm@occ.treas.gov,
lsantamorena@bpd.treas.gov, mbrowne@fdic.gov,
Peter.Nickoloff@do.treas.gov, Michae!.Novey@do.treas.gov,
m1pmp00@frb.gov, m1apw00@frb.gov,
Heidilynne.Schultheiss@do.treas.gov
cc: Sheila.Bair@do.treas.gov, Martha.Ellett@do.treas.gov,
Jose.Gabilondo@do.treas.gov, Jared.Gross@do.treas.gov,
Brian.Roseboro@do.treas.gov, Timothy.Bitsberger@do.treas.gov,
Gary.Sutton@do.treas.gov, mike.brosnan@occ.treas.gov
Subject: FW: comments on retail swaps document (Federal Reserve)

----- Original Message-----

Pat.White@frb.gov [mailto:Pat.White@frb.gov]

Sent: Friday, October 26, 2001 2:15 PM

To: norman.carleton@do.treas.gov

Ce: Patrick.M.Parkinson@frb.gov; Joyce.Hansen@ny.frb.org;
Diane. Virzera@ny.frb.org

Subject: comments on retail swaps document

The attached document was prepared jointly by the Board and the Federal
Reserve Bank of New York.

(See attached file: retswap.comments_fr_102601.pdf)

2 - retswap.comments_fr_102601 pdf

01400000000016


Lorie Logan, Olivia Padilla, and Mike Schetzel
November 8, 2001

Markets Group, Government Securities Staff
(212) 720-1475, 1519, and 2153

Enron Asset Prices Plummet [(b)(5)]

¢@ Enron share and debt prices have declined sharply following revelations that its shareholder’s equity dropped
significantly and the SEC opened a formal investigation into transactions between Enron and the partnerships
headed by its former CFO.

*  [(0)(4) , (b)(5)]

* [(6))]

Enron’s asset prices have declined significantly since mid-October, when Enron first disclosed a $618 million third-
quarter loss and a $1.2 billion reduction in shareholder’s equity. Additionally, the announcement that the SEC would
be conducting a formal investigation of Enron’s related-party transactions, as well as the subsequent downgrades to two
notches above junk status by Moody’s and S&P further weighed on investor confidence. [(b)(4)]

Enron’s share price has declined over 65 percent since mid-October, and is currently trading below $10 per
share for the first time in 9 years.

Enron's Share Price Declines Sharply,
Underperforming the Broader S&P Index

Points i
i
| 1600 $100°
| S&P Gas Subindex (left scale)
1200 $75

S&P500 Index (left scale)

we nen, we |

oe

aoe ~ Enron (right scale)

1-May 15-Jun 30-Jul 13-Sep 286-Oct

° {(b)(5)]

01300000000050


Nickoloff, Peter

From: Carleton, Norman
Sent: Thursday, November 08, 2001 4:31 PM
To: Schultheiss, Heidilynne; Nickoloff, Peter
Subject: FW: Enron Update

Ervon doe

fren Original Message--
From: Roseboro, Brian
Sent: Thursday, November 08, 2001 4:13 PM

To: Carleton, Norman; Clarida, Richard

Cc: Randall_S. _Kroszner (E-mail); Kmalmgre (E-mail)
Subject: FW: Enron Update

ans Original Message-
From: Robert .Elsasser@ny.frb.org (mailto:Robert.Elsasser@ny.frb.org]
Sent: Thursday, November 08, 2001 3:58 PM

To: andrew. jewelledo.treas.gov; anna.corfield@do.treas.gov;

brian. roseboro@do.treas.gov; gregory.berger@do.treas.gov;
james.sharer@do.treas.gov; jeff.huther@do.treas.gov;
jill.cetina@do.treas.gov; joe.engelhardédo.treas.gov;
john.ralyea@do.treas.gov; john.taylor@do.treas.gov;
kathleen.byrne@do.treas.gov; ken.dam@do.treas.gov;
lois.quinn@do.treas.gov; mark.sobel@do.treas.gov;

meg .donovan@do.treas.gov; paul.malvey@do.treas.gov;
paul.o'neill@do.treas.gov; peter. fisher@do.treas.gov;
ramin.toloui@do.treas.gov; shirley.gathers@do.treas.gov;

suzanne .boughner@do.treas.gov; tim.adams@do.treas.gov;
tim.dulaney@do.treas.gov; troy.wray@do.treas.gov

Subject: Enron Update

Enron requires little introduction. The following analysis written by
Lorie Logan, Olivia Padilla and Mike Schetzel summarizes the blow to the
debt and equity prices of Enron and other energy companies, and also
examines the impact thus far on the energy trading markets.

(See attached file: Enron.doc)
Bob Elsasser
Government Securities, FRBNY

robert .elsasser@ny.frb.org
212.720.1234

01470

01200000000124


{(b)(5)]

01400000000024


from Deutsche Bank tomorrow.

--Breakfast, lunch, and afternoon snacks will be provided to agency
representatives on both days.

Thanks for your cooperation.

Regards,
Diane Virzera

(See attached file: Retail Swaps Interview Agenda_#75036.DOC) (See attached
file: Form letter for retail swap survey_#74404.DOC)

diane.virzera@ny.frb.org
Ph: 212-720-7798
Fax: 212-720-1756

Retail Swaps Interview Agenda_#75036.DOC

- Form letter for retail swap survey_#74404.DOC

01400000000027


{(b)(4)]

The CFTC also announced that it has no indication of futures markets disruptions involving Enron Trading
Services, Enron’s registered futures commission merchant. [(b)(4)]

Henry Hub Natural Gas Front-Month Futures Price
Por Million Btu
$5

st
1-May 15-Jun 30-Jul 13-Sep 28-Oct |

*  [(b)(4)]

((b)(4)]

Enron announced on Monday that trading volume for all products on the platform was about 6,500 transactions,
above the 30-day average of 5,800 transactions. However, energy merchant companies that compete with Enron,
including El Paso and Dynegy, have publicly noted an increase in business activity as investors concerns about Enron
have increased over the week.

Today, Dynegy and Enron confirmed earlier speculation that they are engaged in discussions about a possible
business combination, but did not release any terms of the potential transaction. ((b)(5)}

m ¢ 10-year bond is about 10
points higher than yesterday's lows at 75 cents on the dollar, while the equity price is little changed. After declining on
the news yesterday, Dynegy shares rose 11 percent [(b)(5)]

Other primary trading platforms include DynegyDirect, Intercontinental Exchange (ICE), New York Mercantile
Exchange, and TradeSpark in addition to several smaller electronic trading systems.

01200000000127