New York — The Federal Reserve Board on Tuesday, with the full support of the Treasury Department, authorized the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG) under section 13(3) of the Federal Reserve Act.

The U.S. government will receive a 79.9% equity interest in AIG, and has the right to veto the payment of dividends to common and preferred shareholders. The loan is expected to be repaid from the proceeds of the sale of the firm’s assets.

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