WASHINGTON — The latest rescue of American International Group Inc. illustrates the difficulties the government faces in trying to carve up large, systemically important institutions at a time when buyers are scarce and the few there are will only pay fire-sale prices.

It's a conundrum that at least partially explains why the government is not moving to seize control of the nation's top banks. In a speech Monday, Federal Deposit Insurance Corp. Chairman Sheila Bair confronted the question head-on.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.