The controversial government bailout of the huge global insurer, AIG, during the worst days of the financial crisis in 2008, will yield billions of profit for the US treasury and taxpayer.
The treasury department announced Tuesday that it will sell 234 million shares in American International Group (AIG), bringing the estimated profit on the original AIG TARP assistance to $22.7 billion.
The department said more than 90%, or about $380 billion, of the $418 billion spent under the Troubled Asset Relief Program (TARP) during the financial crisis has been recovered through repayments and other income.
Other TARP investment sales were announced this week, including Virginia Commerce Bank, and Century Financial Services Corp. in Santa Fe, both of which took relief deals.
In the four years years, AIG has trimmed its operations, cutting its portfolio from $1 trillion to $550 billion, and is concentrating on providing property, life and retirement insurance products. The company says it has met its obligations to the government and has been profitable for four straight quarters.
The Financial Stability Oversight Council, a group of regulators including the Treasury and the Fed, is debating whether to declare AIG a “systemically important financial institution.” Such a declaration would subject AIG to much tighter regulations, under the Dodd-Frank financial reform law, according to an article by Mark Gongloff in the Huffington Post.
(From Voice of America, and other sources)