A.I.G. Borrows More Money From Federal Credit Lines

Here we go again!

American International Group said Friday that it had borrowed close to half the money in a $37.8 billion credit line set up by New York Federal Reserve Bank to provide liquidity for the insurer’s securities-lending program.

A.I.G., which came close to collapse before the government rescued it last month, said it received $18 billion in cash in exchange for swapping investment-grade fixed-income securities with the Fed, up from $13 billion a week ago. The company’s total government borrowings reached about $90 billion this week, up from $82.9 a week ago.

A.I.G. also said it had borrowed $72 billion under a separate $85 billion credit line with the Fed, up from about $70 billion a week ago. The company is using money from this credit line for collateral obligations related to its credit default swap portfolio and for general corporate purposes.

Edward M. Liddy, A.I.G.’s chief executive, said earlier this week in a PBS interview that the company might need even more money than the $122.8 billion in the two Fed credit lines.

How much is going to be enough for this complete abuse of our resources that we as taypayers have to fund?

The Federal Reserve statistical release is posted at http://www.federalreserve.gov/releases/h41/current/h41.pdf.

Lisa