US bailout to cost less than estimates at USD 89 bn: Report

NEW YORK: The US government's rescue package of financial institutions is likely to cost USD 89 billion, lower than earlier estimates, says a media report.

Attributing to Treasury Department officials, The Wall Street Journal reported that the cost of the bailout programme is likely to reach USD 89 billion.

Treasury officials are planning to extricate the government from its 80 per cent stake in insurer American International Group Inc, the report noted.

The officials are optimistic that the insurer could be on its own within a year, it added.

Last year, the US congressional budget analyst is believed to have estimated that the government's financial rescue package would cost USD 356 billion to taxpayers.

According to the publication, the figure, does not include losses at Fannie Mae and Freddie Mac, which are projected to be USD 370 billion through 2020.

Moreover, the officials project a profit of USD 8 billion from the Treasury's investment of USD 245 billion in financial institutions, the daily noted.

The US Treasury had injected billions of dollars into the financial institutions at the height of the global crisis in 2008.

The report said the USD 89-billion figure includes the Troubled Asset Relief Program, capital injections into Fannie Mae and Freddie Mac, loan guarantees by the Federal Housing Administration and Federal Reserve moves such as buying mortgage-backed securities and propping up the commercial-paper market.