Treasury’s Neel Kashkari on the AIG Bailout

Official overseeing the bailout discusses the agency’s latest actions involving the insurance giant


During a speech Monday, Neel Kashkari--the Treasury official overseeing the bailout--discussed the government’s recent actions regarding troubled insurance giant AIG.

I want to take a moment to discuss the actions we took today with American International Group (AIG) and how that relates to the TARP. The TARP's foremost purpose is to stabilize the financial system. We used TARP funds to purchase preferred stock in AIG, as part of a broader restructuring of their balance sheet, in coordination with the Federal Reserve. This action was necessary to maintain the stability of our financial system. In return, AIG must comply with stringent limitations on executive compensation for its top executives, golden parachutes, its bonus pool, corporate expenses, and lobbying. We recognize that the financial system remains fragile and we continue to stand ready to prevent systemic failures. We worked with the Congress to ensure the TARP included sufficient flexibility to do just this.

AIG, Inc.
Wall Street
Paulson, Henry

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