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 Investment in American International Group (AIG)

Total Treasury and Federal Reserve commitements to AIG

Program Purpose & Overview

At the height of the financial crisis in September 2008, American International Group (AIG) was on the brink of failure. At the time, AIG was the largest provider of conventional insurance in the world. Millions depended on it for their life savings and it had a huge presence in many critical financial markets, including municipal bonds. AIG’s failure would have been devastating to global financial markets and the stability of the broader economy. Therefore, the Federal Reserve and Treasury acted to prevent AIG’s disorderly failure.

AIG’s failure would have been devastating to global financial markets and the stability of the broader economy. Therefore, the Federal Reserve and Treasury acted to prevent AIG’s disorderly failure.

Read more about program status.

Key Facts

  • The U.S. government acted to prevent the disorderly failure of AIG, after concluding that such a failure would have caused catastrophic damage to the financial system and the economy.
  • Treasury, the FRBNY, and AIG completed a restructuring plan for AIG that enabled the company to restore its financial condition, and begin repaying the government's investments.
  • In June, 2012, the last remaining debts owed to the FRBNY from its intervention in AIG were repaid with interest, resulting in a positive gain of $2.8 billion.
  • As of August 30, 2012, the government's remaining investment in AIG is approximately $24.2 billion, which consists of approximately 871.1  million shares of common stock held by Treasury.
  • Based on market prices as of August 2012, the government stands to make a profit on its overall investment in AIG.

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Last Updated: 9/13/2012 2:35 PM