U.S. government is one step closer to being free of AIG
A general view of insurance company AIG on March 26, 2009 in London, England. The company has received more than 170 billion USD from the US tax payer as part of a stimulus package. A substantial amount of this package was subsequently spent on executive's bonuses and despite calls from US authorities and President Obama for this money to be returned so far the company executives have refused.
TEXT OF INTERVIEW
JEREMY HOBSON: It looks like the U.S. government may be a step closer to untangling itself from American International Group, or AIG. That was the company that got the biggest bailout from Washington during the financial crisis. About $180 billion.
Marketplace's David Gura is live for us in Washington with more. Good morning, David.
DAVID GURA: Hey Jeremy.
HOBSON: So what is new here? What's AIG agreed to do?
GURA: Well, discussions between AIG and the U.S. government are still going on. But the company disclosed, in a regulatory filing yesterday, that it's close to a deal with the Federal Reserve Bank of New York, which is where it got some of its bailout money. It still owes them about $20 billion. AIG says it'll be able to pay that back because it made $27 billion on some sales its subsidiaries. You'll remember AIG got the credit line from the New York Fed back in 2008, when the U.S. government gave the company a big bailout, and this is the beginning of a really long process that will probably end with some treasury stock sales.
HOBSON: Treasury stock sales -- David, it's sort of unbelievable to hear about AIG being this close if they are indeed this close to repaying the government. Is the unthinkable possible? Could AIG actually repay all of its bailout money?
GURA: Well, there have been some signs that the government is doing pretty well with these bailouts. It sold off its Citigroup common stock earlier this week for a profit. In a statement, the Treasury Department said this "is a milestone in the government's long-stated efforts to exit our investments in private companies as soon as possible." We, the taxpayers, could stand even to make a profit.
HOBSON: Wow. Marketplace's David Gura in Washington. Thanks David
GURA: Thanks Jeremy.