WANSHINGTON: Insurer AIG, rescued by the US government at the peak of the 2008 financial crisis, will no longer face the stricter oversight of a “too big to fail” institution, the Treasury Department said Friday.
Regulators with the Financial Stability Oversight Council voted 6-3 to relieve AIG of the designation that its failure could “pose a threat to US financial stability,” the department said.
The move greatly eases the regulatory oversight of AIG, which was rescued in a government bailout at the height of the crisis because of its close links with other key financial institutions.
The government saved AIG with a controversial $182 billion bailout that was later repaid in full by the insurer.
It was one of the most momentous decisions taken at the height of the crisis.
Once the world’s largest insurer, AIG was teetering on the verge of collapse under tens of billions of dollars of souring, unhedged derivatives contracts in September 2008 when it sought liquidity from the New York Fed.
On the same climactic weekend that they let investment banking giant Lehmann Brothers fail, the government agreed to lend AIG an initial $85 billion in exchange for a 79.9 percent controlling stake.
AIG was saved as the global financial system stood at the brink of disaster.
If AIG had failed, former Treasury Secretary Henry Paulson said in 2015 in a trial over whether the bailout was even legal, “it would have taken down the financial system and hurt millions of Americans.”
AIG recovered its leading role in the US industrial and property insurance market after it unloaded key international units. The US Treasury sold its final shares in December 2012.
“The Council has worked diligently to thoroughly reevaluate whether AIG poses a risk to financial stability,” Treasury Secretary Steven Mnuchin said Friday.
“This action demonstrates our commitment to act decisively to remove any designation if a company does not pose a threat to financial stability.”
Mnuchin was joined in the majority by other regulators including Federal Reserve Chair Janet Yellen.
Those voting against included Richard Cordray, director of the Consumer Financial Protection Bureau.
AIG applauded the vote.
“The Council’s decision reflects the substantial and successful de-risking that AIG’s employees have achieved since 2008,” said chief executive Brian Duperreault.
“The company is committed to continued vigilant risk management and to working closely with our numerous regulators to enable a strong AIG to continue to serve our clients.”
Shares in AIG rose 1.0 percent in after-hours trade to $62.
AIG stripped of ‘too big to fail’ label by US regulators
AIG stripped of ‘too big to fail’ label by US regulators
Saudi PIF-backed Humain awards AI data center project to MIS
RIYADH: Humain, an artificial intelligence company backed by Saudi Arabia’s Public Investment Fund, has awarded Al Moammar Information Systems Co. a contract to design and build a data center dedicated to AI technologies.
In a filing to Tadawul, MIS said the project’s value exceeds 155 percent of its total revenues for 2024. The company reported revenues of SR1.21 billion ($320 million) last year, implying a contract value of nearly SR1.88 billion.
The development aligns with Saudi Arabia’s Vision 2030 program, which aims to position the Kingdom as a regional technology hub by the end of the decade.
The contract is expected to be signed on Feb. 15, 2026, and does not involve any related parties, according to the statement. MIS will design and construct a private AI-focused data center for Humain.
Earlier this month, Saudi Telecom Co. signed an agreement with Humain to launch a joint venture to develop and operate data centers dedicated to artificial intelligence in the Kingdom.
According to a Tadawul filing, Humain will hold a 51 percent stake in the joint venture, while stc will own the remaining 49 percent.
The data center will be developed through stc’s subsidiary Digital Data and Communications Centers, also known as center3.
The facility will feature advanced infrastructure capable of supporting up to 1 gigawatt of power, starting with an initial capacity of 250 megawatts, subject to customer demand.
Saudi Arabia has been ramping up its AI ambitions. Earlier this month, the Saudi Press Agency, citing the Global AI Index, said the Kingdom ranked fifth globally and first in the Arab region for growth in the AI sector.
The report said the ranking reflects the Kingdom’s progress in artificial intelligence and the success of its economic diversification strategy under Vision 2030.
Separately, MIS said on Dec. 24 that it signed a SR114.43 million contract with the Saudi Central Bank to renew IT systems support licenses. The 36-month agreement covers license renewals and ongoing support, with the financial impact expected to be reflected in the company’s fourth-quarter results.
