The $123 billion liquidity lifeline the federal government is providing to American International Group might not be enough to keep the company going given the credit crunch still hamstringing the economy while it tries to sell off enough assets to pay back taxpayers, Chairman and CEO Edward Liddy warned.

Mr. Liddy made his comments in an Oct. 22 interview with Ray Suarez on the Public Broadcasting System's “News Hour with Jim Lehrer,” where he explained that the company's collateralized debt obligations are weighing heavily on its liquidity.

He said AIG is in the process of cutting costs as it seeks to preserve cash, while at the same time looking to pay off its government loan by selling assets in a market environment that continues to get worse. “Clearly, we'd prefer to be doing this asset sale a year ago or two years ago rather than right now, but I think there will be plenty of excellent demand for what are really very, very good assets,” he said.

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