Yesterday, Treasury announced the sale of its final shares of AIG common stock. Including the proceeds from this latest offering, the overall positive return on the Federal Reserve and Treasury's combined $182 billion commitment to stabilize AIG during the financial crisis is now $22.7 billion.
Also yesterday, Assistant Secretary for Financial Stability Tim Massad appeared
on Bloomberg TV to discuss Treasury’s efforts to wind down its AIG investment and the importance of moving forward on Wall Street Reform:
Assistant Secretary Massad: “The way to look at this is the following – it's great we were able to realize a profit . . . It was a $182 billion commitment. So it’s great that we’ve been able to recover that. But more importantly . . . we've learned a lot of lessons. We learned we can never let a company threaten to take down our financial system like this one did. And that's why things like regulatory reform are so important and those are really the lessons we should be focusing on today.”
Assistant Secretary Massad noted that AIG is a “dramatically different company” today compared to four years ago. Since the financial crisis, AIG has undertaken a significant restructuring effort, which put it in a stronger position to repay taxpayers. The size of the company has been cut nearly in half as AIG sold non-core assets and focused on its core insurance operations. AIG's Financial Products unit (AIGFP) is continuing to be wound down and has cut its legacy derivatives exposure by more than 90 percent to date.
And over the last 19 months, Treasury has conducted six public offerings of AIG common stock, selling a total of 1,655,037,962 shares (originally 92 percent of AIG’s outstanding common stock) at an average price of $31.18. Treasury's $20.7 billion AIG common stock offering in September 2012 alone represented the largest single U.S. common stock offering in history.
The infographic below provides an overview of the effort to restructure AIG and recover the $182 billion Treasury and Federal Reserve commitment – with a profit for taxpayers.
Matt Anderson is a Spokesperson at the U.S. Department of the Treasury.