The U.S. Treasury Department has given American International Group Inc. an improved rescue package to shore up the financial system, according to Neel Kashkari.
Kashkari, the interim assistant secretary for financial stability at the U.S. Treasury Department, makes that statement in New York today at a meeting on the Troubled Asset Relief Program organized by the Securities Industry and Financial Markets Association, New York.
“We used TARP funds to purchase preferred stock in AIG, as part of a broader restructuring of their balance sheet, in coordination with the Federal Reserve,” Kashkari said. “This action was necessary to maintain the stability of our financial system.”
In return, “AIG must comply with stringent limitations on executive compensation for its top executives, golden parachutes, its bonus pool, corporate expenses, and lobbying,” Kashkari said.