Treasury announces completion of AIG plan

By Martin Crutsinger

AP Economics Writer

WASHINGTON (AP) -- The government says it has completed a restructuring plan allowing American International Group Inc. to repay bailout funds it received at the height of the financial crisis in September 2008.

The Treasury Department said last Friday that a previously announced set of transactions with the insurance company and the Federal Reserve Bank of New York were carried out as planned.

AIG repaid a total of $47 billion to the New York Fed as one of several steps toward ending government support. The government now owns 92 percent of the company and plans to sell that stake over the next two years.

The huge insurance company received a total of $182 billion in rescue funds and guarantees after its investments in complex debt securities went bad. Regulators feared that if the company collapsed it would have hurt many large financial institutions that had deals with AIG.

"Treasury remains optimistic that taxpayers will get back every dollar of their investment in AIG," Treasury Secretary Timothy Geithner said in a statement.

In a separate statement, AIG President Robert H. Benmosche said: "Today, AIG, with the support of countless people, has accomplished a huge goal that many people once thought impossible: completely repaying the Federal Reserve Bank of New York."

Published: Tue, Jan 18, 2011