(Bloomberg) — The Federal Reserve Board of Governors didn't want to bail out American International Group Inc. with an $85 billion loan, preferring that the insurer find a savior in the private marketplace, the Fed's top lawyer told a judge.
“We were telling AIG we were not interested in making this loan,” Scott Alvarez, the Fed's general counsel, testified in the lawsuit brought by Maurice “Hank” Greenberg's Starr International Co.'s lawsuit alleging the U.S.'s assumption of 80 of AIG's equity was illegal. “We did everything we could to encourage them to pursue other options.”
The Fed board would “just as soon not have made this loan if they could have avoided it,” Alvarez testified.
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