Geithner: AIG untanglement more difficult

May 20, 2009 9:27:03 AM PDT
Treasury Secretary Timothy Geithner foresees a lengthy involvement with American International Group and is not ruling out more aid to the insurance conglomerate. Testifying before the Senate Banking committee, Geithner said Wednesday that untangling AIG's finances has proven to be more difficult than originally envisioned.

The government holds about 80 percent of AIG's assets and has injected $70 billion into the company from the $700 billion Troubled Asset Relief Program.

Senators criticized the government for letting AIG pay off its top creditors the full value of their debt. Geithner said the government lacked the authority to negotiate a reduction. Said Banking Committee Chairman Christopher Dodd, D-Conn.: "There should be a better answer to this."

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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