Statement by Federal Reserve on AIG

Interesting press release today from the Federal Reserve Bank of New York concerning their transaction involving AIG:

We understand the importance of keeping AIG’s regulated subsidiaries which include its insurance companies well capitalized, and will continue to work with their regulators. Policyholders across the entire AIG family should take comfort from the fact that AIG regulated subsidiaries may be supported by, but are not obligated under, the Federal Reserve loan facility.

As we indicated before the insurance subsidiaries of AIG, including Travel Guard, continue to be sound and it appears from this statement they can only benefit from the Federal Reserve’s loan facility.

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