The Federal Reserve's ongoing involvement with AIG Having lent AIG money to avert the risk of a global financial meltdown, we found ourselves in the uncomfortable situation of overseeing both the preservation of its value and its dismantling, a role quite different from our usual activities. We have devoted considerable resources to this effort and have engaged outside advisers.
These risks relate to further increases in oil prices and prices for agricultural products, stronger than expected wage developments, and a possible increase in the pricing power in some sectors, and the continued vigour of the underlying monetary and credit expansion, despite some stabilisation in the growth of bank credit to the private sector.