TheStreet: Warren Questions Legality of Vote on AIG's 'Too Big to Fail' Label
Easing oversight of AIG 'puts taxpayers and our economy at risk,' Sens. Elizabeth Warren and Sheldon Whitehouse said in letters to members of the Financial Stability Oversight Council.
U.S. Sen. Elizabeth Warren wants to know why members of an oversight panel determined that bailed-out insurer American International Group Inc. (AIG - Get Report) no longer poses a threat to the U.S. economy if it collapses -- and whether activist investor Carl Icahn had anything to do with the decision.
The Financial Stability Oversight Council's vote to lift AIG's designation as a systemically important financial institution, imposed in the wake of a $182 billion taxpayer bailout in 2008, "reduces supervision and oversight of the insurance giant and puts taxpayers and our economy at risk," Warren and Sen. Sheldon Whitehouse, both Democrats, said in letters dated Monday, Oct. 23, seeking answers from each of the group's 10 members.
The council, chaired by President Donald Trump's Treasury Secretary Steve Mnuchin, made the move during a Sept. 29 meeting with little advance public notice and didn't specify the reasons for its 6-3 vote afterward. The so-called SIFI label was developed as the government set up safeguards to prevent a repeat of the 2008 crisis, and companies subject to it face stricter regulatory oversight and higher capital-reserve requirements.
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