The Federal Reserve Bank of New York will lend AIG $85 billion. Explaining the breathtaking move the Fed said, “a disorderly failure of A.I.G. could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance.” They’re not just dumping out the public purse on the counter, though. FBNY will take a 79.9% stake in the company, the collateralized loan is for two years, and is expected to be paid off by selling off assets. NYT writes, “the bailout is likely to prove controversial, because it effectively puts taxpayer money at risk while protecting bad investments made by A.I.G. and other institutions does business with.” You can say that again.
Feds Loan AIG $85 Billion
By Ben Popken September 17, 2008
- the end of an era Former AIG CEO Wins Lawsuit Claiming Bailout Was Illegal, But Gets No Payout
- More Debt More Delinquencies Student Loan Debt Increased $77B In 2014, One In Nine Loans Now Past Due
- better luck next time Former AIG CEO Loses Bid To Sue Fed Over Bailout
- More and More debt Auto Loan Debt Tops $1 Trillion For First Time; All Consumer Debt Nearing $12 Trillion
- not quite settled More Than 2 Years Later, Court Finally Signs Off On $8.5 Billion Settlement… Sort Of