Us Regulators: AIG stripped of ‘too big to fail’ label
Regulators voted 6-3 to relieve organisation of designation that its failure could pose threat to financial stability
PHOTO: REUTERS
WASHINGTON:
Insurer AIG, rescued by the US government at the peak of the 2008 financial crisis, will no longer face the stricter oversight of a “too big to fail” institution, the Treasury Department said Friday. Regulators with the Financial Stability Oversight Council voted 6-3 to relieve AIG of the designation that its failure could “pose a threat to US financial stability,” the department said. The move greatly eases the regulatory oversight of AIG, which was rescued in a government bailout at the height of the crisis because of its close links with other key financial institutions. The government saved AIG with a controversial $182 billion bailout that was later repaid in full by the insurer. Once the world’s largest insurer, AIG was teetering on the verge of collapse under tens of billions of dollars of souring, unhedged derivatives contracts in September 2008 when it sought liquidity from the New York Fed.
Published in The Express Tribune, October 1st, 2017.
Insurer AIG, rescued by the US government at the peak of the 2008 financial crisis, will no longer face the stricter oversight of a “too big to fail” institution, the Treasury Department said Friday. Regulators with the Financial Stability Oversight Council voted 6-3 to relieve AIG of the designation that its failure could “pose a threat to US financial stability,” the department said. The move greatly eases the regulatory oversight of AIG, which was rescued in a government bailout at the height of the crisis because of its close links with other key financial institutions. The government saved AIG with a controversial $182 billion bailout that was later repaid in full by the insurer. Once the world’s largest insurer, AIG was teetering on the verge of collapse under tens of billions of dollars of souring, unhedged derivatives contracts in September 2008 when it sought liquidity from the New York Fed.
Published in The Express Tribune, October 1st, 2017.