Bernanke: We ARE Squeezing AIG

In December, AIG created a “strengthened internal reporting and oversight process” for expenses under the direction of a senior vice president, Bernanke writes.

In addition to monitoring and reporting compliance with the recent expense guidebook, the objective of the new expense review process “is to establish targets for expense reductions consistent with the company’s divestiture program and a reporting framework for the government and other constituencies,” Bernanke writes.

“We believe it is in the taxpayer’s interest for AIG to provide reasonable, market-based compensation with a view toward attracting and retaining qualified staff in order to maintain the value of the businesses that AIG is seeking to sell in order to repay the federal financial assistance it has received,” Bernanke writes.

“We are mindful that the company must avoid excessive compensation and other unnecessary expenditures that do not further this objective,” Bernanke writes.