US Fed selloff of AIG assets grosses $2.8 bn profit for taxpayers

The US Federal Reserve said yesterday it had sold off the last of the assets acquired from bailed-out insurer AIG, grossing a profit  of $2.8 billion for taxpayers in the process.

The New York Federal Reserve said it had disposed off the remnants of assets it had acquired from AIG in 2008, when many of the firm's mortgage bonds went toxic.

Then, the Fed created a special purpose vehicle, Maiden Lane II, to hold the assets in exchange for a $19.5 billion loan, even as it tried (to contain the financial and housing meltdown.

According to William Dudley, president of the New York Fed, the completion of the sale of the Maiden Lane II portfolio had resulted in significant gains for the public and marked an important milestone in the wind-down of the extraordinary interventions necessitated by the financial crisis.

The latest sale, of assets worth roughly $6.0 billion, was acquired by Credit Suisse Securities.

The Swiss bank had earlier acquired a separate tranche of the assets while Goldman Sachs took up $6.2 billion worth this month.