Government Assistance for AIG Summary and Cost.pdfVIP

Government Assistance for AIG: Summary and Cost Baird Webel Specialist in Financial Economics August 14, 2013 Congressional Research Service 7-5700 R42953 CRS Report for Congress Prepared for Members and Committees of Congress Government Assistance for AIG: Summary and Cost Summary American International Group (AIG), one of the world’s major insurers, was the largest direct recipient of government financial assistance during the recent financial crisis. At the maximum, the Federal Reserve (Fed) and the Treasury committed approximately $182.3 billion in specific extraordinary assistance for AIG and another $15.9 billion through a more widely available lending facility. The amount actually disbursed to assist AIG reached a maximum of $184.6 billion in April 2009. In return, AIG paid interest and dividends on the funding and the U.S. Treasury ultimately received a 92% ownership share in the company. As of December 14, 2012, the government assistance for AIG ended. All Federal Reserve loans have been repaid and the Treasury has sold all of the common equity that resulted from the assistance. Going into the financial crisis, the overarching AIG holding company was regulated by the Office of Thrift Supervision (OTS), but most of its U.S. operating subsidiaries were regulated by various states. Because AIG was primarily an insurer, it was largely outside of the normal Federal Reserve facilities that lend to thrifts facing liquidity difficulties and it was also outside of the normal Federal Deposit Insurance Corporation (FDIC) receivership provisions that apply to banking institut