Photo (cc) by DerFussi
CNN reports “the Federal Reserve finally has wiped its hands clean of AIG and turned a nearly $18 billion profit for taxpayers in the process.”
Insurance giant AIG, or American International Group, “played a major role” in the 2008 financial meltdown we’re still clawing back from. At the time, the government bought up a lot of AIG’s bad debt to keep things from getting worse – something that doesn’t usually happen, and a move that couldn’t quickly be undone.
The good news is that the U.S. Federal Reserve just sold the last of the debt it was holding, for a $6.6 billion profit. Combined with earlier sales and a line of credit, that adds up to the $18 billion figure.
The bad news is that another part of the government still holds a lot of AIG. The Treasury Department owns $29 billion, “roughly 53 percent of AIG’s common stock,” according to CNN.
But as the economy improves and the government continues to sell that stock, it also expects to turn a profit for taxpayers. It’s already been selling back to AIG – earlier this month, the company bought back about eight percent of itself. That’s about $3 billion worth.