Fed's $3.6 Billion Planned Cut in AIG's Credit Signals Confidence

Might AIG survive after all? The Federal Reserve appears to believe that the troubled insurer is slowly regaining its strength. The central bank plans to cut its credit line with the firm by $3.6 billion. That might sound bad, but it's actually a sign of confidence on the part of the Fed. Bloomberg reports:

"This means there's little anticipation AIG will need the credit," said Clark Troy, a senior analyst based in Chapel Hill, North Carolina, for Aite Group, a research firm. "It's a step in the right direction in terms of making AIG less dependent on federal aid."

Let's hope, for taxpayers' sake, that AIG does fully recover. If it does, it may eventually pay back the $182 billion bailout.

Read the full story at Bloomberg.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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