Lawmakers must ensure that money being doled out to companies under federal bailout programs doesn't give them an unfair competitive advantage over firms not taking U.S. Treasury funds, the American Insurance Association asserted last week in a letter to Congress.
The letter specifically cites the “Federal Reserve's intervention with American International Group” as well as the Treasury Department's creation of a Capital Purchase Program, under which it has designated $250 billion for qualified financial institutions in the form of equity stakes.
AIA voiced concern that “government ownership of private companies does not produce regulatory policy at the state or federal level that gives those institutions a marketplace advantage over their competitors as government seeks to protect its investment.”
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