American International Group (AIG) is further distancing itself from the Federal Reserve Bank of New York by offering to buy back $15.7 billion in residential mortgage-backed securities. In a letter to the Fed, the insurance giant said the move “is in the best interest of U.S. taxpayers, the government and AIG.” The New York Fed said it has been aware of AIG’s interest in the Maiden Lane II assets for some time. “Any decision on a possible disposition of these assets will be made in a way that maximizes the proceeds to the taxpayer and that is consistent with the goal of fostering financial stability,” the New York Fed said. AIG, which received $85 billion in federal bailout funds three years ago, said it made the offer to ensure the Federal Reserve Bank earns a profit on the securities and to remove more AIG assets from the Fed’s balance sheet. Earlier this year, AIG fully repaid a revolving line of credit it received from the Federal Reserve Bank of New York in 2008. The firm repaid $21 billion of the credit facility and also converted other debt obligations into common shares. In early March, AIG also agreed to sell its remaining securities in insurance firm MetLife to expedite payments to the Treasury Department. The securities were tied to AIG’s sale of its American Life Insurance unit last year. MetLife acquired the unit from AIG for $16.2 billion. As part of the deal, AIG agreed to hold MetLife securities for at least nine months. Then, earlier this month, AIG said MetLife, which originates mortgages through MetLife Bank, agreed to let AIG sell its remaining securities. The offering is expected to raise enough cash for AIG to accelerate its payments back to the Treasury on interest associated with a special purpose vehicle that AIG holds its Metlife securities in. Write to Kerri Panchuk.