AIG IMPROVING BUT MAY NEVER FULLY REPAY GOVT

       Despite some progress, congressional investigators have cast doubt on whether efforst by American International Group (AIG) to restructure its operations and pay back the government will ever prove successful.
       Still, the company's shares jumped about 15 per cent after the head of the House Committee on Oversight and Government Reform said the panel would examine a plan to reduce the AIG bailout package.
       In the biggest taxpayer-funded bailout of a single company, the Federal Reserve and Treasury Department have provided $182.3 billion to the insurance giant. The Government Accountability Office (GAO) said that as of early September, AIG's outstanding balance of aid was US$120.7 billion (Bt4.05 trillion).
       The GAO found "some progress in AIG's ability to repay the federal assistance". But improvement in the company's stability depends on its long-term health, market conditions and continued government support.
       The report concluded that "the ultimate success of AIG's restructuring and repayment efforts remains uncertain".
       Responding to the report, AIG spokesman Mark Herr said: "AIG remains committed to reducing risk and repaying taxpayers."
       Fearing that AIG's collapse could take down the entire US financial system and the broader economy, the Fed first came to AIG's rescue last September.
       The original $85-billion aid package came one day after Lehman Brothers filed for bankruptcy, the largest in US corporate history. AIG burned through the first lifeline, though, and continued to haemorrhage cash. It needed help three more times from the government, which owns about 80 per cent of the company because of the bailout.
       Congressional investigators acknowledged that the federal assistance has "helped stabilisbe AIG's tance has "helped stabilisbe AIG's financial situation". But they said the government remains exposed to credit and investment risks that "could result in the Federal Reserve and Treasury not being repaid in full".
       Representive Edolphus Towns, chairman of the House Oversight Committee, will have the panel study a plan by AIG's former CEO Maurice Greenberg to reduce and restructure the company's bailout package, a committee spokeswoman said on Monday.
       Standard and Poor's equity analyst Chaterine Seifert upgraded her rating on AIG's stock to "Hold" from "Sell" on Monday, saying Towns' review of Greenberg's plan should boost the insurer's stock price in the near term.