Treasury recovers $2 billion in bailout money from AIG

The Treasury Department has recouped another $2 billion from its bailout of the American International Group (AIG), as it continues to unwind itself from one of the largest single aspects of the financial crisis bailout.

That repayment, which came from the previously announced sale of one of AIG's insurance subsidiaries, brings the Treasury's outstanding commitment to the insurance company to $51 billion, after the company received roughly $180 billion in government support following the financial crisis.

“This is another important milestone in AIG’s remarkable turnaround,” said the Tresaury's assistant secretary for financial stability, Tim Massad. “We continue to make progress in recovering the taxpayers’ investments in AIG.” 

In many ways, AIG came to serve as a symbol of much of the public's anger over the bailout, as it found itself at the center of the historic financial crisis and reliant on substantial government support. That dissatisfaction came to a head in 2009, when executives at the company planned to distribute hundreds of millions of dollars in bonuses after earning billions in losses during the financial crisis.

In January, AIG completely repaid the Federal Reserve Bank of New York with a $47 billion payment, and the Treasury in May agreed to sell 200 million shares of AIG stock, raising nearly $9 billion in that offering.

The latest payback from AIG means the Treasury has recovered $313 billion of the investments it made under the Troubled Asset Relief Program (TARP) — roughly three-quarters of the $412 billion it originally dished out to keep the financial system afloat.

The Treasury announced in March that it had officially turned a profit on the bank portion of TARP. It followed that up with a July announcement that it had exited its investment in Chrysler, ahead of schedule but losing about $1.3 billion in the process.

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