The Federal Reserve Board agreed to save American International Group Inc. partly because AIG had enough assets to secure the $85 billion credit facility the Fed provided.

Federal Reserve Board Chairman Ben Bernanke gave that explanation here today during a speech delivered at the Economic Club of New York, according to a written version of the text posted on the Fed Web site.

Bernanke talked about the reasons that the Fed has agreed to rescue some large financial institutions over the past few weeks and not others.

In addition to providing an emergency credit facility for AIG, the federal government has placed the Federal National Mortgage Association, Washington, and the Federal Home Loan Mortgage Corp., Washington, into conservatorships.

The government let Lehman Brothers Holdings Inc., New York, file for bankruptcy court protection.

The government put Fannie Mae and Freddie Mac into conservatorships because letting them fail outright would have caused “unacceptably large dislocations in the mortgage markets, the financial sector, and the economy as a whole,” Bernanke said, according to the written version of his speech.

Stabilizing Fannie Mae and Freddie Mac has helped lead to lower mortgage rates, Bernanke said.

“The difficulties at Lehman and AIG raised different issues,” Bernanke said.

Arranging a government loan for Lehman was not feasible, because Lehman “could not post sufficient collateral to provide reasonable assurance that a loan from the Federal Reserve would be repaid, and the Treasury did not have the authority to absorb billions of dollars of expected losses to facilitate Lehman’s acquisition by another firm,” Bernanke said.

The recently enacted Emergency Economic Stabilization Act of 2008 will give the Fed and the U.S. Treasury Department more choices if a similar situation arises in the future, Bernanke said.

“In the case of AIG, the Federal Reserve and the Treasury judged that a disorderly failure would have severely threatened global financial stability and the performance of the U.S. economy,” Bernanke said. “We also judged that emergency Federal Reserve credit to AIG would be adequately secured by AIG’s assets.”

Some AIG shareholders, including former AIG Chairman Maurice Greenberg, have argued that the terms of the Fed credit facility, provided by the Federal Reserve Bank of New York, are too hard on AIG and its shareholders.

The Fed consciously negotiated terms that imposed “significant costs and constraints on the firm’s owners, managers and creditors” to protect the interests of taxpayers and to mitigate the possibility that lending to AIG would encourage other financial firms to take inappropriate risks, Bernanke said.