Five years after American International Group's emergency takeover by the Federal Reserve Board, a National Economic Council report touts the bailout's successes, while the New York Department of Financial Services reopens an investigation into the insurer's risk-management practices leading up to the federal actions.
In the DFS probe, disclosed in a June letter by Superintendent Benjamin Lawsky, examiners are alleging that AIG may have failed to properly measure and manage risk, misled supervisors and investors, and lacked appropriate checks to limit outsized risk-taking.
The probe is "off-script." That is, federal legislators and state-regulatory authorities have consistently alleged that the AIGFP was overseen by the now-defunct Office of Thrift Supervision. However, states always had full authority to regulate AIGFP; OTS merely regulated AIG's small thrift, based in Wilmington, Del. and Wilton, Conn.
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