WASHINGTON — The federal government has to continue to help American International Group Inc., Treasury Secretary Timothy Geithner said today.
“The financial system still cannot withstand the failure of AIG,” Geithner warned at a Senate Banking Committee hearing on the performance of the Troubled Asset Relief Program.
The government, company managers and company directors must work to separate the troubled derivatives operations of AIG, New York, from the viable insurance units, Geithner testified.
Sen. Richard Shelby, R-Ala., the highest-ranking Republican on the Senate Banking Committee, called AIG a “black hole.”
The government “keeps pumping billions of dollars into it,” and it “still seems to be hemorrhaging money,” Shelby told Geithner.
Some say AIG’s viable assets “were worth more 6 months ago than they are now,” Shelby said. “Geithner, you have got the bear in the house. What are you going to do about it?”