New York Federal Reserve Hosting Meetings on AIG, Says Official

September 15, 2008

The New York Federal Reserve was hosting meetings Monday on the situation of embattled insurer American International Group Inc. with representatives of the Treasury Department, financial services firms and state officials, an official said Monday.

“At the request of AIG and a consortium of financial institutions, we are providing premises to discuss the situation,” a New York Fed spokesman said.

The New York Fed has been “in touch” with the office of New York Gov. David Paterson, but the spokesman declined to comment on details of the contacts.

Paterson said state officials have reached a deal that would allow the insurer to access $20 billion of its own capital by shifting funds from insurance subsidiaries to the parent company.

Paterson also said New York State Insurance Superintendent Eric Dinallo has asked the federal government to provide additional funding to AIG, which employs 8,500 people in New York.

A source told Reuters the New York Fed has hired Morgan Stanley to review options regarding AIG.

The Fed and the Treasury Department declined to comment.

(Reporting by Mark Felsenthal and David Lawder; Additional reporting by Joseph Giannone in New York; Editing by Dan Grebler)

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