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AIG bailout 'significant' taxpayer risk
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| Contributor | Jason |
| Last Edited | Jason Sep 23, 2009 05:13am |
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| Category | General |
| Author | David Goldman |
| News Date | Monday, September 21, 2009 09:40:00 PM UTC0:0 |
| Description | NEW YORK (CNNMoney.com) -- AIG has stabilized thanks to a massive government bailout, but more than $120 billion in taxpayer loans to the insurance company remain at risk, according to a report issued Monday by a bailout overseer.
The Government Accountability Office, which oversees Treasury's $700 billion Troubled Asset Relief Program, said the government's efforts to support AIG (AIG, Fortune 500) have largely succeeded in propping up the company. But AIG continues to rely heavily on federal assistance to maintain that stability.
The GAO said Federal Reserve loans and Treasury Department investments continue to be AIG's primary source of credit. Similarly, the company's steady credit rating, recent profitable quarter and adequate capital levels would not have occurred without taxpayer assistance.
Continued government support will be necessary until AIG can restructure its operations. But that government assistance carries "significant exposure" to credit and investment risks, given taxpayers' enormous loans and 79.9% interest in AIG, according to the report. |
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