The crisis-stricken insurance company AIG has crashed $61.7bn (£43bn) into the red with the biggest corporate loss in US history after being crippled by policies protecting troubled banks against default on loans and derivatives.
From the Guardian:
The crisis-stricken insurance company AIG has crashed $61.7bn (£43bn) into the red with the biggest corporate loss in US history after being crippled by policies protecting troubled banks against default on loans and derivatives.
In a renewed effort to prevent AIG from collapsing, the US government yesterday provided it with access to $30bn of emergency aid. This takes the amount of taxpayers’ funds advanced to AIG to more than $150bn.
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Chief executive Ed Liddy, who was appointed under the instructions of the US government in September, said AIG was too large to be allowed to fail. “Quite simply, the government believes, and we do also, that AIG is a systemically important financial institution,” he said on a conference call in New York.
“There are just too many people and too many institutions in the world that depend on the promise represented by an AIG commitment.”
The massive AIG loss sent the Dow Jones industrial average into a tailspin, falling below 7,000 for the first time since 1997 and ending the day nearly 300 points down on 6,763, a fall of 4.2%. The Standard & Poors 500 also fell – finishing the day at just over 700 after a slump of 4.7%.
To read the full article, visit guardian.co.uk
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