'It's As Easy As AIG!' : Planet Money A small bank means a big regulator for AIG.

'It's As Easy As AIG!'

"It's as easy as AIG," is the slogan for AIG's Delaware-based savings and loan bank. Compared to AIG's huge insurance operations, the bank is tiny, but it was key in getting AIG assigned to its chosen regulator -- the Office of Thrift Supervision.

The Office of Thrift Supervision is a federal regulator that specializes in savings and loans. As we learned in our regulatory arbitrage show, federal regulators market themselves to institutions. For AIG, the OTS was an easy pick because they offered two key bonuses:

1. regulation of its holding company
2. international regulation

These two bonuses saved AIG from having to add more regulators to its already long list. It also meant the OTS was the only agency ultimately responsible for looking over the whole AIG operation, including the problematic Financial Products division. So as a holding company regulator, the OTS isn't looking so hot at the moment. But they did do a good job regulating AIG Bank. That's something they know how to do, they have the staff and they do it well. Regulating the world biggest insurance company -- it's unclear any of our regulatory agencies are up for that job.