U.S. aims to unveil plan to end AIG support: reportNEW YORK | Tue Sep 28, 2010 (Reuters) - The Obama administration hopes to announce by next week a plan to end its support of insurance giant American International Group Inc, the New York Times reported on Tuesday, quoting unnamed sources.
That announcement would come ahead of the November 2 U.S. congressional elections in which President Barack Obama's fellow Democrats are seeking to prevent Republicans from regaining control of the U.S. Congress amid voter anger over government corporate bailouts and other issues.
A government rescue led taxpayers to take a nearly 80 percent stake in the New York-based insurer.
The Times reported the administration's goal is for the U.S. Treasury Department to convert its stake in AIG to common stock in a deal that would be wrapped up by the end of this year. The Treasury Department would sell those shares over time to private investors, the newspaper reported.
The Times cited as its sources two unnamed people briefed on the talks but not authorized to discuss them publicly.
AIG has been negotiating for weeks with officials from the Federal Reserve Bank of New York and the Treasury Department, and representatives of a trust holding AIG stock that was formed on behalf of U.S. taxpayers, the Times said.
The Times said all three parties want to finish their relationship with AIG as quickly as possible, but if they sell their shares too rapidly it could push down the insurer's market value, which determines the amount of money to be returned to taxpayers.
(Reporting by World Desk Americas)
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Let's see. In late 2008, as we saw on the timeline, the Federal Reserve and Treasury pumped nearly $200 billion into A.I.G., once America's largest insurance company, and perhaps the organization in the world with the largest exposure to derivatives as a counterparty. How much will the public get back? “Not very much.”