Fed to appoint trustees for AIG stake: report

NEW YORK (Reuters) - The Federal Reserve is on the verge of appointing trustees to oversee the U.S. government's stake in American International Group Inc (AIG.N), The Wall Street Journal said on Sunday.

The central bank plans to select three individuals with business experience to manage the public's nearly 80-percent stake in AIG, the paper said.

The three independent trustees, who are expected to be named within the next two weeks, would exercise control of the government's equity stake in AIG, taking over that role from Fed and Treasury officials who executed the bailout, the report said.

The government received that stake in AIG after lending the insurer $85 billion to save it from bankruptcy, followed by another loan of $38 billion last week.

Analysts have estimated AIG's balance sheet deteriorated after it clinched the government loan on September 16, as financial markets around the world have sunk, battered by the worst credit crisis since the Great Depression.

A team from the Federal Reserve Bank of New York and outside experts hired by the Fed were trying to assess how money is flowing within and from the company, media reports said last week.