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With the sale of at least $18 billion worth of shares in A.I.G., a number that could grow to $20.7 billion if investors prove enthusiastic, the Treasury Department could reduce its holdings to as little as 15 percent from 53 percent.
Taking the government's stake in A.I.G. below 50 percent is the realization of a long-held goal by both the Obama administration and the company, helping to cut ties to one of the most controversial bailouts of the 2008 financial crisis. The Treasury Department expects to earn a profit on its investment in A.I.G., though it is unclear how large.
"This was always meant as a temporary measure," Henry T. C. Hu, a professor at the University of Texas School of Law at Austin, said. "The faster we can do this as a practical matter, the better for everyone involved."
Professor Hu described the A.I.G. bailout as one of the government's first major interventions in the economy and private enterprise, setting the stage for other major rescue operations.
The latest offering will take place during the heat of the electoral campaign, as the president seeks to defend the use of taxpayer money to save financial institutions like A.I.G.
Administration officials have long said that they would seek to sell off the holdings in private enterprises as quickly as possible, arguing that the government is not a natural long-term shareholder.
Source: The New York Times | MICHAEL J. DE LA MERCED