NEW YORK (Bloomberg) — American International Group Inc. Chief Executive Officer Robert Benmosche told employees he wants to cut in half the fees paid to Wall Street banks to take the insurer's units public.

AIG, which is selling businesses and planning initial public offerings to repay US bailout loans, has been getting advice from banks including Morgan Stanley, Blackstone Group LP, Goldman Sachs Group Inc. and JPMorgan Chase & Co.

"I went into one presentation, and they said, 'Well, the investment banking deal will be in the range of two percent and 2.5 percent'," Benmosche said when asked about fees in an August 11 staff meeting, according to a record obtained by Bloomberg.

"I said, 'How about one percent?' So then everybody's face turned red, and I said, 'So change it'. So we're talking about one percent, not two percent to 2.5 percent." The banks have hundreds of millions of dollars at stake in fees they planned to earn from helping AIG, once the world's largest insurer, repay its government rescue. Morgan Stanley was designated a leading role on any IPOs under Federal Reserve control. Benmosche also wants to rein in the fees charged by attorneys and consultants, he said.

"I am busy getting lists of bankers, lists of lawyers, how many consultants we have," Benmosche told employees at the meeting in Houston. "We forget to look in our own backyard for skills," because managers feel "we need the consultants", he said. "I think we have too many." AIG spokeswoman Christina Pretto declined to comment.

AIG designated New York-based Morgan Stanley and Deutsche Bank AG joint global coordinators of the planned IPO of American International Assurance, a Hong Kong-based life insurer. Deals of that size in Hong Kong have typically yielded underwriters a total of 2.5 percent of the IPO, according to Fed documents released in July.

The initial share sale may raise some $8 billion for AIG, people familiar with the matter said in May. Based on the 2.5 percent rate, that would be $200 million in fees, with the largest amounts going to Morgan Stanley and Frankfurt-based Deutsche Bank.

Alyson Barnes, a Morgan Stanley spokeswoman, declined to comment as did John Gallagher Of Deutsche Bank, Andrea Rachman of Goldman Sachs, JPMorgan's Brian Marchiony and Blackstone's Christine Anderson.