American International Group Inc (AIG) will receive almost $30bn in additional federal assistance in the fourth chapter in the government rescue of the company.
The new cash injection is intended to save the struggling insurers – once the world’s largest insurance corporation – as it is expected to announce $60bn (€47.6bn) in quarterly losses early this morning.
The company, which is considered by the faed as too large to be allowed to fail, previously received about $150bn in loans from the US government, which already controls an 80% stake.
Under the new deal, the US Treasury and the Federal Reserve would provide about $30bn (€23.8bn) in fresh capital to AIG from the government’s Troubled Assets Relief Programme(TARP). The money would be provided as a fall-back line of equity that AIG could tap into as its losses mount up.
AIG already received $40bn in TARP funding . The new plan also calls for the Federal Reserve to take stakes in two of AIG’s international units according to government sources.
Tagged: AIG, American International Group, banking crisis, banking crisis kills insurance industry, Credit Crunch, Fed, Federal Reserve, global recession, recession, TARP, US Treasury
