Financial Roundup: GMAC Gets Bailout, AIG Dumps Derivatives, Banks Need Help for TARP Aid, FASB Gives Fair Value Break

(MoneyWatch)  Merry Christmas, GMAC! -- The financial arm of General Motors, GMAC Financial, got a big present Christmas Eve when the Federal Reserve allowed it to become a bank holding company. Doing so lets GMAC apply for the $700 billion bailout program and perhaps avoid bankruptcy. [Source: The Associated Press]
AIG Dumps $16 Billion in CDSs -- With help from the Federal Reserve, American International Group has retired $16 billion in Credit Default Swaps. A fund created by AIG and the Fed is buying the derivatives. [Source: The Washington Post]

Banks may need help to get TARP funding -- Without saying so explicitly, the Treasury Department may be requiring firms applying for TARP emergency bailout funds to start raising capital on their own first. The trend shows that Treasury wants to bailout banks that have a chance of survival. [Source: American Banker]

FASB may give banks fair value break -- The Financial Accounting Standards Board is proposing rules changes that could let accounts take into account expected cash flows according to whether securities are expected to be sold or held until they mature. The current system makes banks rely on low-ball prices in illiquid markets. [Source: Financial Week]

No, no, no, it ain't me, Babe -- Embattled SEC chief Christopher Cox said in an interview that he wasn't responsible for the failure to detect that Bernie Madoff fraud and that his measured response to the financial crisis was just what was needed. Cox leaves in January. [Source: The Washington Post]