WASHINGTON–American International Group has authority from the Federal Reserve Board to use the agency's credit facility to provide liquidity for its insurance operating subsidiaries, the Fed said Monday.
The clarification was issued by the New York Fed and was confirmed by an official of the New York Insurance Department, which is serving as liaison on the facility between state regulators, the Fed and the company.
It is the first time the Fed has clarified its policies regarding use of the $85 billion credit facility since it was provided Sept. 16 to help AIG deal with a liquidity crisis stemming from the need to provide additional collateral to counterparties in which it had entered into credit default swaps.
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