Bailouts, Bank Bailout | featured news

Fannie Mae earned $17.2 billion last year, the biggest annual profit in the U.S. mortgage giant's history, helped by a record fourth quarter.

Insurer AIG says it will not join a $25bn (£16bn) lawsuit against the US government, which alleges that the terms of its rescue deal were unfair.

A lawsuit claims that the rescue by the government deprived A.I.G.'s shareholders of tens of billions of dollars and took private property for public use without appropriate compensation.

The Treasury Department plans to sell its remaining holdings of common stock in the American International Group, essentially ending taxpayers' four-year ownership of the bailed-out insurer.

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.

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.

Small banks still owe $11 billion of taxpayer money under TARP, and the government is threatening to unload its stakes in them at big discounts to new investors. Nearly four years after Washington bailed out Wall Street, small banks have yet to repay $11 billion of taxpayer money.

Students are protesting on Barcelona's elegant boulevards, public-sector wages are being cut for the second time in three years and resentment is growing against the central government and beneficiaries of bank bailouts.

The government-backed mortgage financier said it made a profit in the first quarter and that it does not need additional bailout money — a first since the federal government took it over in 2008.