(CBS/AP) NEW YORK - Insurance giant American International Group (AIG) is paying off all of the bailout loans it received from the Federal Reserve Bank of New York.
The New York Fed said Thursday that AIG repaid loans totaling $53.12 billion, with interest.
The government stepped in with a $182.5 billion package to rescue New York-based AIG from collapse in the depths of the financial crisis in 2008. It was the largest bailout in history. The Treasury Department provided $68 billion under its financial bailout program, and the New York Fed gave AIG a $114 billion lifeline, part of it in loans.
"This is a major milestone for the Bank and for the public," said William Dudley, president of the New York Fed. Dudley said the loans were made to protect the U.S. economy at a time of great economic stress. "I am pleased we were able to accomplish that policy objective and be fully repaid."
The repayment of loans by AIG represents a turnaround for an insurance company that many had given up for dead during and even after the financial crisis. The insurance company has slimmed down its operations, closed down many of its loss-making divisions and has been profitable for two years.
AIG said Thursday it reduced its total government-authorized debt to date by more than $152 billion.
"We are extremely encouraged by the continued progress our partners at the Federal Reserve and U.S. Treasury have made to profitably reduce the U.S. government's investments in AIG," AIG president and Chief Executive Officer Robert H. Benmosche said in a statement.
The Treasury Department, meanwhile, still owns about 60 percent of AIG's common stock and has been selling its shares in chunks. Treasury has recovered $18 billion of the $68 billion it gave to AIG.
The Fed also still owns some investments it acquired from AIG, which it plans to sell over time.