AIG faces tougher regulation

AIG has warned that the Dodd-Frank Act could “materially and adversely affect AIG’s businesses” if a new risk watchdog decides AIG is too big to fail, Bloomberg reports.

AIG said it would hurt cash flows and credit ratings by forcing it to raise capital, face stress tests and limit bets on private equity and hedge funds.

AIG would need to be deemed a loans holding company or a risk to the financial system to be regulated by the Fed, rather than its current regulator the Office of Thrift Supervision.