Sept. 30 (UPI) — U.S. regulators determined on Friday that insurance company American International Group is no longer “too big to fail.”
The Financial Stability Oversight Council rescinded its determination that AIG’s failure could pose a threat to U.S. financial stability, which was determined after the company nearly collapsed in 2008.
“The Council has worked diligently to thoroughly reevaluate whether AIG poses a risk to financial stability,” Treasury Secretary Steven T. Mnuchin said. “This action demonstrates our commitment to act decisively to remove any designation if a company does not pose a threat to financial stability.”
The decision to rescind the designation passed by a vote of 6-3, with Mnuchin and Federal Reserve Chair Janet Yellen voting in favor of the removal. Richard Cordray, director of the Consumer Financial Protection Bureau, voted against the move and SEC Chair Jay Clayton recused himself from the vote.
AIG was saved from collapse in 2008 by a $182 billion bailout from the federal government, which was paid back to taxpayers over the course of four years.
As a result of the decision, AIG will be free from the threat of more-stringent capital rules put in place after the bailout.
“The council’s decision reflects the substantial and successful de-risking that AIG’s employees have achieved since 2008,” AIG CEO Brian Duperreault said. “The company is committed to continued vigilant risk management and to working closely with our numerous regulators to enable a strong AIG to continue to serve our clients.”
Duperreault took over as CEO of the company in May after former CEO Peter Hancock stepped down from the position as the company reported a loss of $3.04 billion in the fourth quarter of 2016.