American International Group Inc. made recapitalization official last Friday—paying back all its obligations to the Federal Reserve Bank of New York. The move signifies termination of the central bank’s concern in the insurer’s interests. On Friday, the New York Fed accepted $47 billion from a total of $85 billion AIG borrowed and terminated the credit line it extended to AIG as part of the September 2008 bailout.
Thanks to the funds it accepted as part of the Troubled Asset Relief Program, (TARP) the New York Fed has been AIG's largest creditor for the last two-plus years, and as a result, has had a heavy hand in the company's restructuring, with federal officials involved with the company's board of directors, and receiving regular updates on AIG’s financial strategies.
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