American International Group Inc (AIG), rescued by the US government at the peak of the 2008 financial crisis, will no longer face the stricter oversight of a “too big to fail” institution, the US Department of the Treasury said on Friday.
Regulators with the Financial Stability Oversight Council voted 6-3 to relieve AIG of the designation that its failure could “pose a threat to US financial stability,” the department said.
The move greatly eases the regulatory oversight of AIG, which was rescued in a government bailout at the height of the crisis because of its close links with other key financial institutions.
The US government saved AIG with a controversial US$182 billion bailout that was later repaid in full by the insurer in what was one of the most momentous decisions taken at the height of the crisis.
Once the world’s largest insurer, AIG was teetering on the verge of collapse under tens of billions of US dollars of souring, unhedged derivatives contracts in September 2008, when it sought liquidity from the New York Fed.
On the same climactic weekend that they let investment banking giant Lehmann Brothers Holdings Inc fail, the government agreed to lend AIG an initial US$85 billion in exchange for a 79.9 percent controlling stake.
AIG was saved as the global financial system stood at the brink of disaster. The insurer recovered its leading role in the US industrial and property insurance market after it unloaded key international units.
The treasury sold its final shares in December 2012.
“The council has worked diligently to thoroughly reevaluate whether AIG poses a risk to financial stability,” US Secretary of the Treasury Steven Mnuchin said. “This action demonstrates our commitment to act decisively to remove any designation if a company does not pose a threat to financial stability.”
Mnuchin was joined in the majority by other regulators including Federal Reserve Chair Janet Yellen.
Those voting against included Consumer Financial Protection Bureau Director Richard Cordray.
“The council’s decision reflects the substantial and successful derisking that AIG’s employees have achieved since 2008,” AIG chief executive Brian Duperreault said.
“The company is committed to continued vigilant risk management and to working closely with our numerous regulators to enable a strong AIG to continue to serve our clients,” he added.
Separately, US President Donald Trump on Friday said he would select his nominee to be the next Fed chair within weeks, after meeting potential candidates.
Trump said he would decide who chairs the US central bank after interviewing Kevin Warsh, a Fed governor during the 2008 financial crisis and former Morgan Stanley banker, Fed Governor Jerome Powell and two other candidates.
“I’ve had four meetings,” Trump said as he left the White House for a weekend at his golf club in New Jersey. “I’ll be making a decision over the next two or three weeks.”
The US leader has to decide whether to replace Yellen as Fed chair when her four-year term is up in February next year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts