The Federal Reserve Board said last week that it has authorized a transaction to provide American International Group with an additional $37.8 billion on top of the $85 billion line of credit already extended.
Explaining the arrangement, the Fed said the Federal Reserve Bank of New York has been authorized to borrow up to $37.8 billion in investment-grade, fixed-income securities from AIG in return for cash collateral.
The securities involved were previously lent by AIG's U.S. life insurance company subsidiaries to third parties, such as banks and investors.
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