AIG's risk to stability reduced; qualifies for less oversight: Yellen

Washington

AMERICAN International Group Inc poses less of a threat to financial stability because it shrank its assets by more than US$500 billion, Federal Reserve chair Janet Yellen said on Monday in explaining why she voted in favour of releasing the company from stricter oversight.

Her comments and others published by regulators on Monday shed light on a process financial firms say is too opaque and unaccountable, indicating big banks and insurers will have to downsize dramatically if they are to shake off the "systemically risky" label.