New York Fed Selects Trustees For AIG Stake
by Kristina Cooke
January 16, 2009
NEW YORK (Reuters) - The New York Federal Reserve on Friday named three trustees to oversee the U.S. government's nearly 80 percent equity stake in insurer American International Group.
The government received the stake when it rescued the insurer with an $85 billion loan in September 2008, though the shares have not been issued yet. The bailout has since swelled to about $150 billion.
The trustees are Jill Considine, former chairman of the Depository Trust & Clearing Corporation, Chester Feldberg, former chairman of Barclays Americas and Douglas Foshee, chief executive officer of El Paso Corporation, the New York Fed said on its website.
The New York Fed, in its role as a lender, will continue to oversee AIG's (NYSE: AIG) financial operations. But, it said, it had structured the trust to avoid potential conflicts of interest with the New York Fed's supervisory and monetary policy functions.
"The New York Fed cannot exercise any discretion or control over the voting and consent rights associated with the equity interest in AIG," it said.
The trustees will have the same rights, powers and privileges as other shareholders of AIG and will have absolute discretion and control over the government's AIG stock. They will not sit on the board of directors at AIG.
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