US government intervention saves AIG for a second time
The US government announced today that it would take an additional $40 billion (£26 billion) stake in AIG, to stop the beleaguered insurance giant from collapsing.
The US government announced today that it would take an additional $40 billion (£26 billion) stake in AIG, which sponsors Manchester United, to stop the beleaguered insurance giant from collapsing.AIG, which was formerly the world's largest insurance broker, has already benefitted from the US government's Troubled Asset Relief Program (Tarp) and this latest announcement brings the total invested in the company to $150 billion, according to the BBC.
Today AIG announced losses of $24.5 billion in the third quarter, which may have triggered the government's move.
US officials said that their priority was intended to "keep the company strong and facilitate its ability to complete its restructuring process successfully".
The $700 billion Tarp program designed by federal reserve chairman Ben Bernanke and treasury secretary Henry Paulson was initially intended to help banks through the financial crisis.
AIG is the first insurance broker to benefit from the package.
The move could be good news for customers who have cheap life insurance or cheap car insurance policies with AIG's affiliated UK companies.
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