U.s. Treasury, Bank Bailout | featured news

The U.S. Treasury further reduced its stake in American International Group and said on Tuesday that the United States would now profit $15.1 billion from bailing out the insurer.

The Treasury said on Friday it is changing the way Fannie Mae and Freddie Mac will repay taxpayers in a move the Obama administration said would accelerate the winding down of the government-owned mortgage financiers.

Fannie Mae and Freddie Mac, the two mortgage-finance giants, this week reported some of their best quarterly results since the real estate collapse. On Wednesday, Fannie Mae posted second-quarter net income of $5.1 billion. That is up from $2.7 billion in the first quarter of this year and an improvement from a net loss of $2.9 billion in the second quarter of last year. Fannie requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers.

The U.S. Treasury Department launched its fourth sale of shares in American International Group, with the insurer committing to repurchase two-thirds of the $4.5 billion in shares being offered to the public.

Shares of American International Group Inc fell more than 3 percent on Wednesday after the insurer and the U.S. Treasury sold $8.7 billion worth of stock.

Troubled insurer AIG is to repay a $21bn bail-out loan, paving the way for a share sale by the US Treasury.

The Treasury Department said Monday it will begin selling the stake it owns in Citigroup Inc., which could result in a profit to the government of about $7.5 billion. Government received 7.7B shares in exchange for $25B it gave the banking firm during credit crisis.

The department persuaded some big banks to pay more than market estimates to repurchase warrants issued to the government during the financial crisis, suggesting taxpayers could benefit from costly financial-rescue programs.

Treasury Secretary Timothy Geithner on Wednesday moved to extend the government's $700 billion bailout fund into October 2010 and pledged to deploy no more than $550 billion of it.

GMAC, the car financing company, is set to receive up to $5.6bn in a new capital injection from the Treasury, filling a hole identified in the “stress tests” earlier this year and paving the way for the government to become the majority shareholder