The Federal Reserve secretly selected a handful of banks to bid for debt securities acquired by taxpayers in the U.S. bailout of American International Group Inc., and the rest of Wall Street is wondering what happened to the transparency the central bank said it was committed to upholding. 

The deal was part of Maiden Lane II, created in 2008 to buy holdings that AIG handed the Fed in exchange for a cash injection. The portfolio includes bonds backed by the types of home loans with some of the highest default rates, such as subprime, Alt-A and option adjustable-rate mortgages that helped fuel the housing bust. Read more at Bloomberg.